Author: Jim Horton

We are often told to think outside the box, be creative, smash old paradigms and find new ones.  But there are times when a box fosters creativity and is essential to artists, entrepreneurs and business persons.  Here is an example.  The Pantone color system put an end to the headache of identifying colors and using them consistently in one’s work.  It is an essential tool everywhere and assists creative solutions in all forms of media and decoration.  One wonders why an inventor failed to come up with such a solution long before it was discovered in 1963.  The beauty of the Pantone system is its exactness. It specifies the blend of paints and inks to make the same color time after time.  As any colorist can tell you, that is hard to achieve.  So, while Pantone is a standardized tool, it facilitates out of the box thinking and imagination.  Communicators should consider this.  Some things are best when they are routine.

Bob Lutz is a long-time car guy who has served in the top ranks of multiple auto manufacturers.  When he speaks about cars, he talks from experience.  That is why this opinion piece focused on Tesla is a serious PR problem for the electric vehicle company.  Lutz picks apart the economic and technology model of Tesla and predicts imminent doom for the business unless it cuts costs now.  That is contrary to the vision of Elon Musk who believes in invest, invest, invest and someday profits will show.  This approach depends on the forbearance of banks and investors whom Musk must charm as long as he can.  To be fair, Musk doesn’t see Tesla as a typical car company.  He is out to save the world with an electric auto, but the world will ask who is paying the piper.  There is no doubt the Tesla is the ultimate performance vehicle run only on electricity, but Lutz points out in a time of two dollar gasoline, there isn’t much call for it.  Tesla is teetering on a cliff and had better be prepared to respond before it pitches over.

This story outlines a PR opportunity.  It is about consumers’ inability to figure out health plans.  The opportunity, of course, is to devise and explain a plan that they can easily grasp.  The first company that achieves this will take market share from competitors.  Why hasn’t it been done already?  Because health coverage is complicated and its myriad of options can only confuse customers who are trying to pick what is best for them.  Hence, the problem and opportunity.  PR practitioners alone cannot devise easier plans to comprehend.  It will take a coordinated effort on the part of actuaries, marketers, lawyers and others to work through the complexities and simplify them.  Almost certainly, the impetus for change will have to come from a CEO who is customer oriented.  The PR department is usually too low in the power structure.  But, the practitioner can always pitch the idea.

One doesn’t value Generally Accepted Accounting Principles until they are ignored and a major failure results.  Consider this company.  Valeant sticks to the letter of the law by giving GAAP numbers in its press releases but it also presents and emphasizes non-GAAP earnings in which certain expenses have been deleted from the bottom line.  Hence, Valeant can show a higher earnings per share than it would under GAAP.  Now that Valeant is in trouble, its non-GAAP earnings are being held up as an example of what not to do.  The company’s financial reporting has cost it credibility and its stock price, which has plummeted.  So, why do companies continue to report scrubbed numbers?  Because they can get away with it.  They honor the letter of the law but fracture its spirit.  It is poor investor relations, but look for it to continue as long as management can make itself look better.

PR becomes difficult for a company that has passed its peak in the marketplace and is on a downturn.  Consider GoPro.  A year ago, it was the video camera to have if one is athletic and wanted to record one’s activities.  Now it is struggling to make sales and earnings forecasts. and it is branching out to drones to see if it can reignite growth.  It seems that it mispriced a consumer-level camera introduced earlier in the year, but more than that, the market for athletic cameras might not be as big as the company hoped.  What do you say, what do you do to expand the market?  That is the challenge the company faces.  It has been moving more into video production as a way to support sales, but that clearly isn’t enough.  The PR practitioner is faced with unpleasant choices — flog product that isn’t selling or help develop new markets if they are identified or both.  Either way, the job is more difficult than promoting cameras during their peak sales period.

When an organization doesn’t know what to do, transparency in its actions can harm rather than help.  It becomes clear to observers that the entity is drifting on strange seas.  Such may be the case for the Federal Reserve.  There are claims that it doesn’t know how to handle inflation and is clueless on the progress of the economy.  This is the reason why month after month, the Fed keeps interest rates near zero.  The US economy isn’t reacting to low interest rates as one thinks it should.  More money hasn’t resulted in faster growth, yet unemployment is down to acceptable levels.  The Fed has worked hard to be more transparent in its decisions unlike its mysterious and gnomic declarations in the past, but greater disclosure hasn’t resulted in more light and credibility.  Rather, it is showing the limits to what the Fed can do to spur the economy.

Volkswagen has done wrong and deserves to be punished, but should it have to endure this kind of pain?  The scramble of tort lawyers to find clients has long been disgusting, especially since lawyers stand to gain more from the class action suits than plaintiffs.  There ought to be a better way to get justice for victims than ambulance chasing, which is what the bar is doing.  Tort lawyers offer no apologies for their behavior.  Rather, they defend it as part of the process of getting justice for victims.  Maybe so but they are focused more on their payday than the victim’s remuneration.  These are people who have their own jets to get them around and live in luxury on the percentage of winnings they extract from clients.  Lawyers should be well paid to take on such work, but they should not be obscenely compensated.  Until there is reform in the law, ambulance chasers will flourish.

Character is often revealed in little things, and it is those small items that people look for.  Take, for example, this event.  Being told to move from a quiet car is hardly a piece of news, but the way one went is.  If Christie had apologized and moved to another train car, there wouldn’t have been much to report.  But, apparently according to news accounts, he didn’t.  He barked at his bodyguards and moved less than graciously to another part of the train.  Predictably, the internet lit up with comments, some expanding the incident and others simply reporting it.  The perception of the way Christie departed the quiet car is the issue.  If it smacked of privilege, Christie comes off as arrogant.  If it was an error quickly corrected, the public would give him slack.  Christie’s problem is that he comes off as a bully more often than not, so a good number of the public imagined that he did not go willingly.  Whatever happened, this little thing did not help him.

There are eight days to go before the borrowing authority of the US Treasury runs out.  The Secretary of the Treasury has sounded an alarm, but Congress is busy.  For one, the House has to elect a new Speaker.  There is a good chance that authorization will pass in the nick of time but House radicals want to use it for public relations purposes and to condemn the indebtedness of the country.  There is a time to protest and a time to get along.  This is a time to act rather than holding the country hostage.  What isn’t clear is whether the radicals understand that.  In an attempt to make a statement, House conservatives might be shooting themselves in the public’s perception — an example of negative PR.

I will be away tomorrow and won’t be writing.