Stop the Presses

This week’s XM satellite radio outage is interesting in a number of ways. XM chief execs have a vested interest in remaining squeaky clean prior to their proposed merger with satellite radio competitors Sirius. They have the advantage of observing how RIM poorly handled BlackBerry outage in two countries and to learn from that. The discounts they’ve offered customers for the outage is generous. Critically now, they must fully appreciate the real take-away: that XM radio is a utility, not a luxury. As such, they need to deal with outages just as expeditiously and to communicate as widely as the water, telephone, and electric companies.

Because these luxuries have become utilities, providers will be held to the higher communication standards that public utilities are. Businesses whose services have become utilities must have a communications plan ready to go.

There are two main areas where XM Radio could have done a better job:

1. Lack of communication: Despite having their customers’ telephone numbers, e-mail addresses, and other contact information for marketing purposes, they didn’t have a plan in place to use those resources to communicate anything other than a sales message. Even traditional broadcast media outlets—like radio and television—could have helped spread the word to customers. Americans are quick to forgive, but hold a grudge when they feel they’re being ignored.
2. Their message missed the mark: Finding an apology on the XM web site requires clicking a link innocuously titled ‘XM Service Updates’ at the bottom right-hand corner of the site’s home page. Once you’re there, this is what you see:

XM Radio Resumes Normal Levels of Service

XM Satellite Radio has resumed normal levels of service for customers who experienced outages or significantly degraded service starting yesterday.

The problem occurred during the loading of software to a critical component of the satellite broadcast system, which resulted in a temporary loss of signal from one of the company’s satellites.

After you turn on your XM radio, please allow five to ten minutes to reacquire the XM signal.

XM apologizes for any inconvenience this has caused.

What is the first rule of corporate communications? Think like a customer (not an engineer). This apology doesn’t show that XM understands the discomfort caused its customers. It certainly doesn’t tell customers how vitally important they are to XM Radio.

This outage was a short-term issue without fatal or long-term consequences for the company. It can be a helpful shot across the bow that helps this powerful new medium perceive itself and its relation to its customers differently.

Outages will occur. Expectations have been increased. Be transparent, be quick, and be communicative. It’s what your customers now expect.

From cave drawings, to picture books, to a ghost tale spoken in hushed tones around a campfire, human beings are always interested in a good story. We begin to truly communicate when our stories have pictures that our audience can see or imagine. It is how we empathize, which is the highest form of listening.

The reason I’ve been thinking about all of this is because of the recent testimony by Deputy Attorney General James Comey, and the impact it’s had on the Alberto Gonzales attorney scandal. Comey’s testimony took an experience that doesn’t conjure up mental imagery—a constitutional crisis of the highest order—and transformed it into a universal image. After all, who can’t imagine an older man, sick and slightly disoriented in his hospital bed, with two able-bodied (and perhaps ill-intentioned) men bursting through the door? That’s certainly much easier for the average American to envision and develop an emotion around than abstract concepts of individual rights and liberties.

Did Comey make the story so easy to understand that we’ve reached a tipping point that will force Gonzales’ exit? As damaging, shocking, and riveting as it was, Comey’s testimony is not itself the final dagger in the heart of the administration—rather, it is one of a thousand pinpricks, albeit a significant one. Before Comey’s testimony, America wondered if Alberto Gonzales was competent. Now we wonder if he is a good man. And that is never a good question to have asked.

Pictures, whether real or imagined, move us closer to the point of action, the tipping point. Just think of My Lai. Abu Ghraib. Tiananmen Square. Valdez, Alaska. Comey’s testimony shows us that the most effective communication means telling a story and creating a picture in the mind of your audience.

Today, Barry Bonds inches closer to breaking the home run record set by Hank Aaron more than 30 years ago. Baseball fans—according to some, divided along lines of race–hotly debate Bonds’ record book eligibility. And, because Major League Baseball has backed itself into a corner, it is doing the only thing it can do: nothing.

MLB cannot embrace Bonds because, while he hasn’t been found guilty of using illegal steroids, he is surrounded by the BALCO controversy and associated with others who have pled or appear guilty. The long-term risk is untenable.

At the same time, Major League Baseball cannot condemn a man who is, to date, innocent. So right now we see MLB gently observing and applauding Bonds without taking the lead.

The question for Major League Baseball is, at the end of the day, do you embrace or erase Barry Bonds? Because of its lack of action years ago – when it could certainly see the bionic drug problems on the horizon, but made the decision to do nothing (and was widely accused of moral compromise for the sake of selling tickets and putting fans in the seats) – MLB is losing credibility among the American public. That public is in the uncomfortable position of acknowledging that their national pastime may reflect modern-day society a little more than they’d like it to.

Could this situation have been avoided? Not likely – we are just at the beginning of a performance-enhancing drug tsunami, which will only become increasingly torrential as ever-more sophisticated drugs enter the marketplace. To be sure, the situation could have been dealt with more deftly.

Crisis communications is about leadership, courage, and integrity. The longer a problem is ignored, the greater the chance of it metastasizing into a crisis. Here, a garden variety substance abuse problem has grown into a crisis that raises questions about the very credibility of the game, with many people pondering a drug issue through racial lenses.

Had MLB addressed the steroid issue years ago, the racial division surrounding Bonds’ record would be a non-issue.

So what do we learn here? When addressing a problematic situation, you must look not only at the present, but also at the past and especially the future. MLB would have been wise to realize what many of us have learned in our personal relationships—that ignoring all those little red flags only leads to very big and very sticky situations.

JetBlue’s founder and CEO David Neeleman stepped down today when his board suggested that he ‘could best serve the company as a strategic visionary.’  According to the board and Neeleman, this was in the works for quite some time and has nothing to do with the February 14th flight delays.

However, it’s hard not to hear the message being sent:  Board members value long-term risk management over immediate crisis response.  Even nearly heroic crisis response measures aren’t as important as an aversion to risk.

There are several lessons that other CEOs and boards can learn from this situation:

1. It comes down to money: JetBlue says this was planned for some time, but it’s highly likely that the Valentine’s Day disruption hastened the board’s decision. Despite his very strong leadership, David Neeleman is learning the unfortunate reality that, at the end of the day, ROI is what matters. The bottom line is the bottom line.
2. Manage risk over crisis: There is no doubt that Neeleman guided the company through a tough time that cold February weekend.  The JetBlue board’s decision was a sign that they value long-term risk management more than crisis response.  Avoid crisis by managing risks today.
3. Don’t sacrifice the brand:  The JetBlue board is betting that the JetBlue brand is greater than Neeleman–and they’ll be correct, if the airline continues to place emphasis on the customer service policies Neeleman created and implemented…after all, there aren’t many companies that set up their self-service systems so that customers in ‘irregular’ situations can waive their own change fees, or that promise to pay customers who are unnecessarily delayed.  Make sure that your brand fulfills its promise to customers.

Paris Hilton is going to jail for 45 days. But will this latest in a series of ‘scandals‘ be a speed bump or another launching ramp in her ‘career?’ The rules for the rest of us are different than celebrities, particularly celebrities who are famous for being famous.

My feeling is that, all judgment aside, her most recent brush with the law won’t harm her brand in the short term, and, in the upside down world that is entertainment, will help it. You can already see her new book, album, and television spin-off: “The Simple Life in the Big House.” Her new publicists are no doubt managing calls this week on who gets the exclusive. For a while, almost anything she does, as long as it is victimless, will build her naughty girl brand.

However, from a public relations point of view, Paris’ law-breaking behavior will garner a different reaction when:

• She starts a family: If Ms. Hilton becomes a mother, the public will measure her differently. If and when Ms. Hilton becomes a mother, her behavior will be judged through the critical lens of parenthood. No one can argue the career damage pop diva Britney Spears’ recent activities have created, factored exponentially since she’s the mother of two.
• She does it again: Right now, Paris is daddy’s naughty little rich girl. The offense doesn’t seem quite as offensive when we attribute the crime to the time and circumstances of daddy’s indulgence and her youth. After 45 days in jail, any repeat performance from Paris won’t be seen as naughty—it’ll be seen as habitual, which is not a far step from problematic. And with that, the rules of judging her behavior will change.
• She gets older and/or loses her looks: Young, beautiful people have carte blanche—as a society, we’re very forgiving when it comes to excusing the indiscretions of youth. Were Paris convicted of this crime in her 40s rather than her 20s, the public view would be radically different. Case in point: Nick Nolte. Even though he was arrested for a similar crime, the perception is much different. The lovely young Paris gets a DUI and the public thinks, “Oh, these kids today.” The mature and less attractive are held to a higher standard: Nolte gets a DUI and the public thinks, “Oh my God, what happened to him?”
• She loses her money: Not likely but still possible, if Paris were to be cut off from the family money, today’s ‘cute’ would become tomorrow’s ‘pathetic.’ Kind of like when Mike Tyson squandered earnings of more than $300m, then filed bankruptcy and announced an exhibition tour, saying that he ‘needed the money’ and thought it would ‘make him feel better about himself.’

Like Kato Kaelin before her, Paris Hilton was not content to be famous just for being famous, trying her hand at acting in the 2006 Razzie Award nominee House of Wax. She may soon learn that you can fly closer to the glare of ‘all publicity is good publicity’ when you’re younger, but the older you get the stronger the spotlight–and the stronger the likelihood that your wings will melt.

The whole Deborah Jeane Palfrey, AKA ‘The DC Madame‘ situation is a fascinating one, and a barometer by which Washington, DC determines who is ‘powerful.’ ABC won’t (and can’t) embarrass all 10,000 people whose numbers show up on Palfrey’s phone records–and heaven forbid she called her plumber or ordered pizza from that phone–but they and other media will go after those who are the most easily embarrassed, e.g. those in power and those who have the most to lose.

The first targets will be people whose public actions or persona would make their interactions with Palfrey appear the most hypocritical. Case in point is Senior State Department official Randall Tobias, who preached abstinence as part of his job and resigned shortly after receiving ABC’s call.

If You Think You’re on Palfrey’s List

What if you fear you’re on Ms. Palfrey’s list? Rather than waiting to see if 20/20 mentions you in tonight’s broadcast it’s important that you understand ABC’s modus operandi, and that you take a few steps right now to protect yourself.

1. Understand ABC’s ‘evidence’: Realize that, as far as we know, ABC has only phone records. That means that they’re calling people on the list. If the phone number you had 4 years ago is no longer in service, you’re probably safe; see step 5 below for one caveat.
2. Dump your phone: If you conducted ‘business’ with Ms. Palfrey via your cell phone, now is a great time to NOT answer your phone unless you are certain you know who is calling…and even better, to lose the phone completely. Immediately change your cell phone voicemail message to a generic greeting (e.g. ‘This is 555-555-5555, please leave a message). Go buy a new phone with a new number.
3. Change your work number: If you used your work phone in this situation, it could go a couple of ways. If the number that appears on the call recipient’s caller ID is a ‘general’ work number, you’re probably fine. However, if your call can be traced back to a direct dial number in your office, you’re going to need to determine what kind or relationship you have with your boss. Can you tell him/her, “I think I’ve done something that may embarrass the company and I need my direct dial number changed?”
4. Determine your true risk: Decide how powerful you really are. If you aren’t publicly doing something that could be seen as hypocritical (like serving as chairperson for an AIDS prevention campaign or on the board of a large church–just as examples) then you are not likely to be singled out.
5. Google your number: Right now, ABC appears to be just calling numbers on Palfrey’s list, but it’s perfectly feasible that they or other media may choose to start using the Internet to find out who the owners of specific numbers are. If the phone number you used to conduct ‘transactions’ with Ms. Palfrey is published online anywhere that you have control over–e.g. your company web site–removing it from there is a stopgap measure. Be aware, too, that even if ABC chooses not to go this route that doesn’t mean you’re in the clear–other media outlets and bloggers may pursue it.
6. Get a lawyer: Keeping in mind the ‘powerful’ litmus test above, if there is any chance you’re on the list, see an attorney. Immediately.
7. Plan to talk with your partner: Decide how you will handle this with your spouse. If you’re single, there’s less chance that you would be of interest to the media–prostitution combined with adultery makes for better ratings, especially during sweeps week. If you are married, you need to start thinking about how and when you might approach this with your spouse so that they don’t turn on the news and see you exposed (double entendre intentional). Whether your spouse leaves, or stands beside and behind you, will be a determining factor in how you handle the publicity.
8. Stay low: A phone number is not guilt. Do not volunteer more than the evidence that is in play. Once the titillation of the first revelations has passed, people will lose interest. At some point, the list of the accused will be larger than the audience who’s watching.
9. Deny loudly: If you are innocent, scream loudly if the cameras come toward you. Make sure that your denials are louder than their accusations. Find 3^rd parties who are willing to publicly vouch for your character and credibility.

All of this makes me wonder about us as a society. How gargantuan is our salacious appetite? What we have here, and have had in other situations, is the possibility of a shocking story rapidly morphing into sexual McCarthyism. This story will harm both the powerful and the powerless.

I thought it was called a ‘private life’ for a reason.

Today’s lead story in the WSJ How Credit-Card Data Went Out the Wireless Door is as much about what not to do when a company is caught in the crosshairs of a crisis as the JetBlue story is an example of the right thing to do.

From a crisis PR perspective, TJX appears to have worked hard to turn themselves from victim to villain, making three classic communications errors:

1. They waited too long. TJX waited for engineers to be satisfied that they understood the depth of the problem, resulting in at least a 60-day delay of action (resulting in investigations by 30 state attorneys general.)
2. They put lawyers in charge of communications. Lawyers play a critical role in crises, but directing communications should not be one of them. When TJX made their long awaited announcement and subsequent apology, their apology was not written with their customers–the real victims in this situation–in mind, but instead read like a letter written by lawyers. (The apology is here; click ‘important customer alert’ to access it.)
3. They put Wall Street in front of Main Street. TJX made sure that their earnings announcement came out prior to the data loss announcement…once again, putting their own needs in front of their customers‘.

When confronting a crisis, the most important thing is to run to it and meet it head on. Put your customers first. This isn’t about the profits for one quarter–it’s about the long-term relationship you have with the people who help you create your profits and your brand.

During crisis, companies need to think like a customer and ensure that their words–and even more importantly, their actions–prove that customer needs are the number one priority.