Tag Archive: Zappos


Dealing with Each Other

“We’ve always taken the view that we have to physically be together from an employee perspective. People don’t work as well remotely … We want employees all in the same physical space to have more collisions. In fact, we’ve done weird things to prioritize collisions over convenience.” – Zappos CEO Tony Hsieh.

hsieh

“Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings.” – Jackie Reses, Yahoo Human Resources executive vice president

Having worked in Silicon Valley for 15 years, Almost DailyBrett gets it when it comes to the Internet. It’s hard to argue with 2 billion users around the world and growing, sending 2.8 million emails every second…and that was way back in 2011.

The Internet was supposed to free us to work any place, any time in any attire (or non-attire) and contribute just as well to our employer or even obtain a degree online.  The Net spawned a wide variety of new acronyms (e.g., SEO and SEM), even some that are getting outdated (e.g., HTML) and others that are gaining steam including MOOCs or Massive Open Online Courses.

We can digitally communicate and self-publish with a few taps with our mobile device or legacy laptops (desk tops are now so 20th Century) to anyone at anyplace at any time. We can send “selfies” of our mugs and other anatomically parts (right, Anthony Weiner?). We can also use the Internet, whether wirelessly or with the remaining wired devices, to NOT communicate with anyone at anyplace at any time.

And there lies the rub.

Back to the Future; Back to the Office?

Tony Hsieh is seen as a pioneer when it comes to delivering a “Wow” experience to Zappos customers The company name is a play off the Spanish word, Zapatos, naturally sells shoes over the web. Sounds a little dull…until you and Harvard Business Review take a deep dive into the $1 billion-plus business.

Tony (last name rhymes with Shay or Shea) follows the mantra of under-promising and over-delivering. Your shoes are supposed to arrive in three days (e.g., piece of cake for Hsieh et al.); Zappos will get your order to you in two days or less. The customer is happy…real happy. Sounds like a Pharrell Williams song. Tony is real happy too as a result of Amazon purchasing Zappos for $1.2 billion.

Zappos, located in Lost Wages, Nevada,  is continuously ranked as a super place to work and has even adopted the management concept of a holacracy or a self-governing operating system; no more imperial edicts from the corner office to the great masses of unwashed employees.

holacracy

And yet when you weigh the coolness factor of Zappos’ “Wow!” customer strategy and its holacracy management system, it still requires the old-fashioned show up for work and deal with your colleagues approach. Sorry no more working remotely.

What does this message say for the future?

Face-to-Face Communications

“Public Relations helps establish and maintain mutual lines of communication, understanding, acceptance and cooperation between an organization and its publics.” – Public Relations Professor and founder of “Public Relations Journal,” Rex Harlow

The threat posed by the University of Phoenix, DeVry University, Kaplan University, Capella University, Ashford University and other online diploma mills to the traditional bricks-and-mortar universities is real. They are not constrained by space and offer an endless “long tail” to their perspective students.

In fact, you can secure your bachelor’s degree or above from these hallowed institutions. It will just be you, your online instructor and conceivably other students typing away and maybe even Skypeing from remote locations around the globe.

A few questions come to mind: What about building, enhancing and solidifying relationships? What about developing qualitative skills or the ability to interview people and describe their experiences as a result of direct interaction? What about effectively working in teams? And what about the “collisions” mentioned by Tony Hsieh?

zappospeople

 

There is no doubt that MOOCs are here to stay, and even the venerable bricks-and-mortar universities are offering their imprimaturs to one-up the University of Phoenix types. And yet neither the online courses offered by the new kids on the block nor the digital courses presented by the old guys can replicate real face-to-face communications.

This need for direct people-to-people interaction is particularly salient to public relations. The whole notion is relating to the public, particularly difficult reporters and editors. At some point, you have to meet people. You can’t just hide behind your monitor.

Some may seriously disagree with the movement to compel folks out of their pajamas, forcing them into business attire and into their vehicles for the dreaded fossil-fuel commute to the office. And waiting for them there will be colleagues, superiors, subordinates, customers, partners, distributors, butchers, bakers and candle-stick makers.

We have to deal with all of them, like it and be adept at this skill. Digital codes have transformed the world, but only to a point. We still have to learn to interact and co-exist with people, preferably in person as opposed to an impersonal email, tweet or text.

http://en.wikipedia.org/wiki/Massive_open_online_course

http://techcrunch.com/2009/11/02/amazon-closes-zappos-deal-ends-up-paying-1-2-billion/

http://www.youtube.com/watch?v=y6Sxv-sUYtMhttp://www.youtube.com/watch?v=y6Sxv-sUYtMhttp://www.youtube.com/watch?v=y6Sxv-sUYtMhttp://www.youtube.com/watch?v=y6Sxv-sUYtM

http://www.forbes.com/sites/stevedenning/2014/01/15/making-sense-of-zappos-and-holacracy/

http://www.forbes.com/sites/petercohan/2013/02/26/4-reasons-marissa-mayers-no-at-home-work-policy-is-an-epic-fail/

https://almostdailybrett.wordpress.com/2012/04/01/curtains-for-bricks-and-mortar-universities/

 

 

 

 

It would be hard to make this up.

Our Club Universe American tour guide to the “Evil Empire” in 1981 was named … Joseph McCarthy.

Over a round of adult beverages in the “office” (e.g., hotel bar), he assigned an unofficial tag line for the state-run Aeroflot, essentially public transportation in the sky: “The Longer the Flight, The Longer the Delay.”

If your flight was about two hours from Moscow to then-Leningrad; now-St. Petersburg, the delay was about two hours. If you were flying eight hours from Moscow to Novosibirsk…Lenin help you.

aeroflot

The in-flight cuisine was Tatiana delivering plastic cups of mineral water. That’s all, folks.

With Aeroflot at the time, you knew what to expect. Yes, there was a consistency of product.

You were back in the USSR; You don’t know how lucky you are boy…

The Soviet Union has now gone into the history books, even though Russia with all of its backwardness and sadness (even with the temporary joy of the Sochi Olympics), still exists.

What also exists are customer expectations and consistency of product. And in most cases that is a “Good Thing” as Martha would say.

Take Starbucks (NASDAQ: SBUX) for example.  The line sometimes goes back to the door. The prices are high. Knowing the author of Almost DailyBrett and $3.70 will result in a Grande mocha with no whip. And yet so many will shell out for their daily fix. The Grande mocha tastes the same in Dublin, Ireland as it does in Ellensburg, Washington.

Some may scoff at McDonald’s (NYSE: MCD), but the company has nailed fast food. You know what you are getting and there is a consistency of product. Yes, a Big Mac tastes the same in Tokyo as it does in Brussels as it does in Hood River, Oregon.

Amazon (NASDAQ: AMZN) has essentially pioneered digital retailing. The company even acquired online shoe store, Zappos, which built its reputation on under-promising and over-delivering (shoes arrive before their promised delivery date), literally providing customers with the consummate “wow” experience.

Amazon fulfillment center

Digital search-engine leader Google (NASDAQ: GOOG) has become a verb, an ultimate sign of success as in “Google this; Google that.”

For flyers of Southwest Airlines (NYSE: LUV), you know what you are getting and not getting. Plan on joking flight attendants, Boeing 737-700s that are habitually on time, peanuts and/or pretzels and a soft drink. Don’t plan on assigned seats or in-flight cuisine. There is a consistency of product, and that speaks to the company’s brand as the nation’s leading low-cost carrier. Reportedly based on percentages of applicants vs. acceptances, the percentages are more in favor of being admitted to Harvard than landing a job at Southwest.

The point is these firms have learned the lessons from failing companies (or companies that should be put out of their misery), including J.C. Penney, Braniff, and Circuit City.

What is the usual customer expectation driving into the parking lot of any state’s Department of Motor Vehicles? There are three absolutes in life: Death, Taxes and DMV.

As you emerge from the car, you can sense your pulse quickening and your blood-pressure rising. Your dog-eared copy of Leo Tolstoy’s War and Peace is ready at your side. Will Napoleon’s Grand Armee drive to Moscow and beat a snowy retreat to France before your number is called at DMV?

dmv

Everyone, staring at the linoleum floors, sitting in the plastic chairs, and waiting for the cheerless bureaucrats, has the same pained look on their collective faces. Are your papers in Ordnung? If your papers are nicht in Ordnung, you will be sentenced to the gulag…another trip to DMV.

Yes, your expectations are being fulfilled, and (alas) there is a consistency of product.

Even though DMV operates in a monopoly position, similar to nationalized industries in the former Soviet Union, would anyone in their right mind invest in this stock: (NYSE: DMV)?

Keep in mind, DMV does not have a corner on the market when it comes to a desultory customer service experience. There is always (drum roll), the United States Postal Service.

How about staking a portion of your life’s savings in (NASDAQ: USPS)?

The USPS reached an all-time peak of volume served in 2006. It has been all downhill ever since. In 2013, the USPS lost $5 billion on top-line revenue of $66 billion. Not only is the USPS underperforming vis-and-vis its private sector competition, Fed-Ex and UPS, but the digital writing is on the wall as the Internet is providing even more reasons (e.g., online bill paying) to avoid costly snail-mail.

postoffice

This reality is evidenced in those selected to provide “customer service” at USPS stores (e.g., post offices). If there is the potential of staffing four registers, the USPS will offer two joyless staffers even though the customer line is stretching out the door.

Yes, there are customers standing in long lines at many Starbucks, but they have a happy ending in the offing in the form of a latte, cappuccino or mocha. At the USPS, joy comes with reaching the front of the line, shipping your package, buying snail-mail stamps and then mercifully…leaving.

To many, the word “corporate” has become a dirty word. And you can see the roots of the negativity, multi-million executive “golden” parachutes, Bernie Madoff Ponzi schemes, Walmarts driving smaller competitors out of business etc. etc. etc.

Having acknowledged the obvious, there is a flip side to the word, “corporate.” The other side of the story revolves around great products, literally millions of jobs, and bursts of innovation. Do we think of Starbucks or the DMV (or even Amtrak) when it comes to a superb product and a super customer experience? When it comes to innovation, would we bet our future on Amazon’s ability to move products or the USPS?

Many are wary of the prospect of DMV-style “service” when it comes to services provided by government, whether it be auto registration, mail delivery or maybe even health care.

http://en.wikipedia.org/wiki/Aeroflot

http://en.wikipedia.org/wiki/United_States_Postal_Service

http://en.wikipedia.org/wiki/Zappos

http://en.wikipedia.org/wiki/Bernard_Madoff

http://en.wikipedia.org/wiki/War_and_Peace

Most of the time, I come down hard on the side of Adam Smith and The Wealth of Nations.

So why am I aligned more on the side of the ACLU and Ralph Nader’s Public Citizen when it comes to First Amendment Rights of Free Speech, and Yelp reviews?

yelp1

The answer lies in a complicated set of circumstances and trends with many sinners and very few saints.

Let’s try to make some sense of these intertwined factors:

● Our society has evolved from agrarian/agriculture to industrial/manufacturing to technology/service provision.

● Web 2.0 through the means of digital ones and zeroes has not only put word-of-mouth advertising on steroids; it has given consumers an unprecedented level of control over the reputations and brands of service providers (e.g., doctors, lawyers, contractors, Realtors, resorts, restaurants, butchers, bakers and candle-stick makers).

● Yelp (NYSE: YELP), TripAdvisor (NASDAQ: TRIP), Angie’s List (NASDAQ: ANGI) are the market leaders in affording consumers and travelers digital opportunities to publicly review service providers. They also have business models based upon delivering lots of eyeballs to advertisers, thus attempting to satisfy shareholders.

● The personal reputations and brands of service providers are in play as never before, assisted by positive reviews and potentially damaged by negative criticism. The best defense for service providers is a good offense as exemplified by the Zappos creed of under-promising and over-performing, delivering a “Wow!” experience to consumers.

● Yelp has been accused of being willing to employ its “automated review filter” to remove negative reviews in exchange for advertising dollars. An L.A. dentist with some negative reviews allegedly was informed that these critiques could magically go away by means of a few Yelp advertising dollars. The doctor during on-camera interview equated this practice to “blackmail.”

● Virginia resident Jane Perez hired building contractor Christopher Dietz to perform some work. She was not pleased. She wrote negative reviews about Dietz on Angie’s List and Yelp, giving him the dreaded one star out of five potential stars review.

dietz

● Dietz in turn claimed that Perez’ less-than-pleasant review cost him an estimated $300,000 in business, and in turn filed a $750,000 defamation lawsuit against Perez. The case is going to trial. The ACLU and Public Citizen are representing Perez on a pro bono basis. Did Chris Dietz really sue his customer? Would you hire Mr. Dietz to fix your deck, knowing you too could end up in court as well?

Dude, what are you thinking?

So what do we have here?

  1. Publicly traded online consumer review outlets in search of big-time and small- time advertising dollars.
  2. Literally thousands of service providers, each of which is critically dependent on their good names and reputations to be successful and stay in business.
  3. Consumers, who can ethically or unethically inflict literally hundreds and thousands of dollars’ worth of damage against the reputation and brand of a service provider, and possibly put themselves rightfully or wrongfully in the cross-hairs of a defamation law suit.
  4. The rights of consumers to use their constitutionally guaranteed rights of free speech to express their opinions and by doing so providing a service for fellow consumers.

And what are the public relations/marketing/communications implications for this simmering stew of providers, reviewers, lawyers and Yelpers?

Service providers need to understand and accept that the rules of engagement have forever changed and are continuing to change. Doing a good job and delivering a great service and/or product is the best defense on the planet.

Service providers need to constantly monitor what is being said about them via social media sites and blogs. And if a review is less than positive, the provider needs to respond pronto. In some cases, there is value in accepting the criticism and moving to make things right. If not, the service provider needs to respond and offer a professional rebuttal. If the service provider does not have the time to monitor digital media, then she or he should hire someone to do so.

Consumers should be mindful that service providers have legal rights. They can defend themselves against willful defamation. They can also launch countersuits, and win.

When Yelp, TripAdvisor, Angie’s List all decided to go public, accept investor dollars and report quarterly and annually, they triggered questions as to which priorities are more important: advertisers, shareholders or reviewing consumers. Maybe these firms would be better off going private.

These firms, particularly Yelp, need to be cautious about responding to a wounded service provider with an offer to essentially trade advertising for a little sleight of hand when it comes to algorithms (Poof! … the negative review has gone away). Wonder if that is what happened to my Yelp review about a particular Pleasanton, CA Realtor, Tim McGuire of Alain Pinel Real Estate?mcguire

Our First Amendment Rights of Free Speech are precious. They need to be protected, safeguarded and cherished. Having said that, there are limits besides not yelling “Fire!” in a theatre. An example of these limits is deliberate and willful, and most of all untruthful, defamation of a service provider’s character, reputation and brand.

Service providers would be well advised from a PR standpoint to think long and hard about filing one of these defamation suits. The $750,000 suit by Christopher Dietz against Jane Perez has drawn the attention of the national media, including the Washington Post and Beltway network affiliates, (guess who they are privately rooting for?). And if and when Mr. Dietz publicly loses his case, they will be sure to make the verdict very public.

Dietz will be known as that contractor guy, who sued his customer because she wrote a bad Yelp review. Want to hire Mr. Dietz for your next construction job? Make sure your lawyer is on your speed dial.

http://www.washingtonpost.com/local/crime/750k-lawsuit-over-yelp-review-will-go-to-trial/2014/01/26/63e9d372-8539-11e3-8099-9181471f7aaf_story.html#!

http://www.washingtonpost.com/blogs/crime-scene/post/aclu-public-citizen-to-fight-lawsuit-over-negative-yelp-review/2012/12/20/9242b430-4ab8-11e2-b709-667035ff9029_blog.html

http://www.washingtonpost.com/local/crime/2012/12/04/1cdfa582-3978-11e2-a263-f0ebffed2f15_story.html

http://www.huffingtonpost.com/2013/10/30/yelp-lawsuit-_n_4179663.html

http://www.ibtimes.com/yelp-extortion-rampant-say-small-business-owners-class-action-lawsuit-against-review-bully-appealed

http://www.nbclosangeles.com/news/local/Yelp-Under-Fire-for-Alleged-Pandering-to-Advertisers-232472381.html

http://finance.yahoo.com/news/christopher-deitz-sues-jane-perez-over-negative-yelp-review-222800638.html

http://finance.yahoo.com/q/pr?s=YELP+Profile

http://sueyelp.webstarts.com/

https://almostdailybrett.wordpress.com/2011/07/11/loss-of-control-how-to-safeguard-reputations-and-brands-in-a-digital-world/

http://www.yelp.com/biz/tim-mcguire%E2%80%94alain-pinel-real-estate-pleasanton.

https://almostdailybrett.wordpress.com/2010/09/17/hard-lesson-in-seo-search-engine-optimization/

“What happens in Vegas…will probably end up on YouTube.”

Since the onset of truly interactive computer-mediated communication more than a decade ago (Web 2.0), pundit questions mainly revolved around whether digital social media could ever be effectively monetized.

Wall Street finally responded last May 19 with enthusiastic institutional and retail investor response to the initial public offering (IPO) of LinkedIn.com. Securities for the business networking oriented social media outlet were offered on the New York Stock Exchange (NYSE: LNKD) and the results that day constituted the biggest IPO since search engine Google Inc. debuted in 2004. LinkedIn was initially priced at $45, but opened at $83 up 84%. The stock eventually peaked at $122.70 before closing at $94.25, a 109% gain for the day, representing $8.9 billion in market capitalization.

linkedin_logo_11

Despite the impressive results for the initial offering of publicly traded securities for LinkedIn and the fact that there are no longer questions about whether social media has authentic monetary value, the IPO was widely seen by financial and market analysts as preliminary at best.

LinkedIn capitalized on being the “first mover” among social media companies, prompting many to ask what will happen when Twitter, Groupon and most of all, Facebook with its 600 million subscribers, (any or all) decide to take their respective shares to the public marketplace. Will they trigger a second Internet bubble?

Underneath all of the euphoria (irrational exuberance?) about digital interactive media, the use of ones-and-zeroes, transmitted in packets across switches and routers or wirelessly via the satellite, are troubling questions about this relatively new means of communication.

There are publicly traded and privately held companies with products to sell, non-profits with missions to fulfill, governments with essential services to provide, and politicians with electoral messages to deliver. Most are using digital publishing in an attempt to reach their target audiences, but at the same time (and maybe truly for the first time) these very same audiences, some with competing agendas, have unprecedented capability to target the messengers. Instead of “vertical” one-communicating-to-many, it is increasingly “horizontal” with the “audience” participating in the conversation. The game has changed and the rules are still being developed.

Today, we can look back upon a growing litany of examples of how ease-of-use interactive publishing and related conversations are upsetting the best-laid public relations and marketing plans of those charged with reputations to protect and brands to manage.

Consider that one blogger ultimately prompted the recall of Intel’s vaunted Pentium processor; bloggers repudiated a “60 Minutes” story extremely critical of former President George W. Bush, leading to the “resignation” of Dan Rather; a BART passenger video-taped and posted footage of the 2009 New Year’s evening shooting of Oscar Grant, leading to a conviction of the officer in question and setting off civil disturbances in Oakland; undercover cameras and super-sensitive microphones discredited ACORN and NPR;  Rep. Anthony Weiner (D-New York) was pressured into resigning in the wake of his Tweeting of his “junk” to selected females across the fruited plain. Train Station Shooting

What, where, when and who will be next to experience the loss of reputation and branding control to interactive media? Has the digital playing field been leveled to an unprecedented effect? Is this an unintended consequence of Web 2.0?

Think of it this way, reputations and brands are now traded commodities in the marketplace of public opinion. And just like securities, reputations and brand equities can rise with “shareholder” approval or they can crash under pressure from this same audience.

The question is not whether there are unintended loss-of-control consequences of Web 2.0, but instead what are the strategies to safeguard reputations and brands, and how they should be implemented? The birth of micro-blogging/content sharing sites: LinkedIn in 2003, MySpace in 2003, Facebook in 2004, Flickr in 2004, YouTube in 2005 and the 140-character-per-message Twitter in 2006, rapidly accelerated the growth to a staggering number of Web 2.0 subscribers.

The power of each of these social media sites and the ones that will inevitably follow (e.g. Google+) is magnified by the number of friends, connections, contacts that can be reached with a short message and a few key strokes. Will publicly traded and privately held companies, non-profits, governmental entities, appointed and elected officials ever regain hegemony over their cherished reputations and hard-fought brands or must they learn to live with a permanent loss of total control?

The answer is undoubtedly the latter. If this is indeed the case, then what are reasonable techniques and strategies that can be employed in this Web 2.0 era of digital self publishing with ease-of-use software tools? Here are five reputation-and-brand protection strategic recommendations for consideration by public relations practitioners, marketing/brand management professionals and social media evangelists.

1.)   Quality Products; Credible Messaging

The keys to success will be the specific relevance of the message, and the effectiveness of the delivery of the message or program in the time and space where the potential customers want to receive it, not where the marketers want to shout it out,” Irene Dickey and William F. Lewis. 

The point being made by academics Dickey and Lewis is the best way to defend a reputation or a brand is to deliver credible messages in a timely and effective way to customers. Doing the right thing at the right time deserves to be rewarded regardless of the unprecedented speed of global communications. Is a good offense the best defense?

Take Zappos.com as an example. The $1 billion online shoe seller has a distinct philosophy of under-promising and over-performing for its customer base. The company’s leadership is constantly exploring way to sustaining the high quality experience it is known for – to deliver “wow” to its customers, suppliers and partners. The targeted result: Positive and consistent word-of-mouth advertising. Said Alfred Lin, Zappos chairman, CFO and COO: “…Word of mouth works a lot faster on the Internet than it does person-to-person because you can just e-mail out a bunch of your friends and say ‘hey I just had this amazing experience.’ That was one of the reasons that we wanted to keep upgrading shipping.”

lin Erik Qualman in his Socialnomics cited a study by the Strategic Planning Institute that 96 percent dissatisfied customers don’t bother to complain, and 63 percent of these silent dissatisfied customers will never buy from the vendor again. Through networked customer feedback, it is much easier for a company to respond and make things right. Douglas Rushkoff offered very simple advice: “Marketers need to learn that the easiest way to sell stuff in the digital age is make good stuff.” 

2.)   Treating Reputations and Brands As Tradable Equities 

“More young people will learn about IBM from Wikipedia in coming years than from IBM itself,” New York Times Columnist Thomas L. Friedman 

Qualman was just as direct as Friedman when he stated that if you maintain a large, well-known brand you can rest assured (or not rest assured) that there are online conversations, pages and applications being constantly developed around a brand. He cited an August 2008 Facebook search for lawn-care equipment provider, “John Deere,” and discovered 500 groups dedicated to John Deere; more than 10,000 users total in the top-10 groups. Chief competitor, Caterpillar, also maintained a page in John Deere’s top-10 listings and one simply called “John Deere Sucks!!!” also made the top-10 list on the social media site. Along with the ascent of interactive social media has been a corresponding decline of consumer trust in brands.

According to advertising agency, Y&R, consumer trust in brands dropped from 52 percent in 1997 (generally agreed upon birth year of Web 2.0) to only 22 percent in 2008. It should also be noted that the worldwide recession began in 2008, but that does not alone explain the 30 percent drop in brand trust.

Canadian author Malcolm Gladwell wrote that Facebook and other social media sites are extremely effective at building networks, which he said “are the opposite, in structure and character, of hierarchies. Unlike hierarchies, with their rules and procedures, networks aren’t controlled by a single central authority. Decisions are made through consensus.”

3.)    24/7/365 Monitoring and Response

“The digital bazaar is a many-to-many conversation among people acting in one or more of their many cultural roles. It is too turbulent to be directed or dominated,” Author and columnist Douglas Rushkoff. 

What is the direct effect of Rushkoff’s assertion about the turbulent seas of social media with its many-to-many discussants in the conversation? For those charged with protecting a reputation and safeguarding a brand, it means that the most carefully laid marketing and public relations plans can be shattered in record time.

It means that just as global equities are traded virtually every day of the year as the sun moves over the Nikkei in Japan, the Hang Sang in Hong Kong, the DAX in Germany to the FTSE in London to then to the NYSE and NASDAQ in New York, the same is true for brands. The sun never sets on global markets and brands; in fact brands are being traded on a 24/7/365 basis in the digital interactive marketplace of public opinion.

Consider the infamous sucker punch by Oregon running back LeGarrette Blount against Boise State’s Bryon Hout immediately following their game in 2009, and captured in all of its intensity by ESPN’s cameras. Today, there are 17,400 search engine optimization (SEO) results on Google for the keystrokes, “LeGarrette Blount sucker punch.”

blountpunch

For the University of Oregon Athletic Department and its carefully crafted image, the damage from Blount’s actions was swiftly demonstrated in cyberspace with an immediate YouTube video, Wikipedia post and literally thousands of comments on Twitter and Facebook. A reputation and brand can come under pressure at any time of day or night, requiring constant vigilance and assigning individuals specifically charged and authorized to respond on behalf of a company, governmental entity, appointed or elected official or an educational institution.

4.)   Fiduciary and Corporate Social Responsibility

“Can companies do well by doing good? Yes – sometimes.” Aneel Karnani.

Publicly traded and privately held companies and by extension the public relations and business development firms that counsel them must worship at the altar of fiduciary responsibility. Karnani in his 2010 Wall Street Journal piece stated the global movement for better corporate governance dictates that executives must seek the best return possible for their investors. He said that managers who sacrifice profit for the common good also are in effect imposing a tax on their shareholders and arbitrarily deciding how that money should be spent. If push comes to shove between fiduciary responsibility and corporate social responsibility, the former will usually prevail…but still there are benefits for society.

Wrote Karnani: “Consider the market for healthier food. Fast-food outlets have profited by expanding their offerings to include salads and other options designed to appeal to health-conscious consumers. Other companies have found new sources of revenue in low-fat, whole-grain and other types of foods that have grown in popularity. Social welfare is improved. Everyone wins.”

Should companies spread this fiduciary responsibility (and by extension improving society) message via social media tools? The risk is being accused of “green washing” or something worse by detractors of the brand. Companies do not have a choice about participating in this on-line discussion. The question is how well they do it.

In particular, publicly traded companies have a fiduciary responsibility to generate the best return for their investors – in many cases their own employees – and why shouldn’t they triumph their activities on behalf of shareholder value? If communities, workers and the environment benefit from healthier foods, less-power hungry devices, more fuel-efficient cars, while at the same time related companies are producing returns for investors, then let there be a race to use social media tools for the gratification of the companies as well as their detractors. Truth should be the defense against “greenwashing” charges. Let the conversation commence.

kfc

5.)   Honesty, Openness and Transparency

Companies don’t have a choice on whether they do social media; they have a choice in how well they do it,” Erik Qualman, Socialnomics, 2009

In the case of social media, someone is always watching YouTube videos, posting JPEGs on Flickr, sending Tweets via Twitter, inviting connections on LinkedIn or friending or unfriending on Facebook. There are frankly millions of netizens and they are always on, around the clock and around the world. And the rate of innovation is accelerating at a pace never seen before in human history. It took 38 years for radio to reach 50 million users;  television 13 years; the Internet, four years; iPod, three years; Facebook added its first 100 million subscribers in just nine months.

Publicly traded and privately held companies, non-profits, governmental entities, educational institutions and appointed and elected representatives live in a fish-bowl world. The rules of the game have changed, and yet there are still rules of engagement. Ghostwriting of executive blogs should to be publicly disclosed. Companies need to focus on quality products, under-promise and over-deliver.

Statements need to be credible and respectful or as John Madden once said: “I will never say in private what I wouldn’t say in public.” The Web 2.0 digital world is demanding accountability, honesty and transparency. If these simple rules are followed the consequences associated with the loss of control should be benign. However, if the conduct is not becoming of a reputation that has been hard-earned and brand equity that has been built, both of these can come tumbling down in just a matter of mouse clicks.

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