PR Resource

In California, heavy rains and a deep snowpack in the high Sierras would seem to have ended the long drought in the state.  Everyone can go back to watering lawns and filling swimming pools.  But, they can’t.  The drought isn’t over according to the State Water Resources Control Board.  This is a difficult message and more difficult persuasion that the regulators have undertaken.  They are telling citizens who have experienced the downpours that one year of wet winter weather is not enough.  Will the populace listen and will water delivery agencies continue to hunt down wasters and fine them?  Only time will tell. If the state’s dams refill to their former capacity and water releases become mandatory, it will be a tough job to keep citizens in line.  Next year will reveal whether the drought is really over or not.  If the state gets a suitable rainfall and snowpack two years in a row, the Control Board could consider lifting some restrictions.  Will Californians wait that long?

Because public relations is what you do and not what you say, this is smart PR.  You take photos of your room, send them to the company via an app on your phone and get back a visual redesign of the space you can use at once.  The advantage is that it all happens within the app and there is no other software required.  The company is still in test on the system but it will come out of beta soon enough and already looks to be successful.  The only persons who will be dismayed are interior designers.  But, some of them might find employment with the company.  The benefit of the program is that it makes something complicated look and work easily.  That is intelligent and effective PR.

There is a special worry when one knows a certain crisis can erupt at any time, and one can’t stop it.  Consider Chipotle and E.coli poisoning.  The outbreak hit the company hard across the US, but in spite of efforts to identify the source, the cause is unknown.  That means Chipotle is set up for further E.coli outbreaks and is powerless to defend against them.  The company has strengthened food buying and handling procedures, but those are no guarantee the bacteria will be controlled because Chipotle has no idea what caused the problem.  The most the company can do is to maintain a fast reaction force should the bacteria erupt again in one of its restaurants.  That would mean shutting down the restaurant quickly, testing for sources and hopefully neutralizing the problem.  In spite of scientific progress, there are still mysteries and the pain of not knowing is real.

Sometimes there is nothing one can do in a crisis.  It will play out at its time length be that short or long.  Here is a case in which the resolution of the crisis will take months if not years.  There is little to be done to make drinking water in Flint, MI safe except to change the pipes leading to houses and businesses. Meanwhile, Flint’s citizens have to live on bottled water, an inefficient and irritating interim solution.  Left unsaid is who will get their pipes changed first.  That alone will be a major upset if it looks as if one group is being favored over another.  The mayor of Flint might save the town time by submitting his resignation before he is voted out of office, which he surely will be.  It will be up to the mayor’s successors to solve the crisis once and for all, and the resolution will be painful.

Since PR is what you do and not what you say, this counts for terrible PR.  Not only is Theranos losing its biggest customer, it has been sanctioned by the FDA for dangerous laboratory practices in its California facility.  Not long ago, Theranos and its CEO were darlings of the media with a story of entrepreneurial pluck and luck.  Then, the Wall Street Journal revealed that its basic technology, which uses only a drop of blood, was flawed and gave misreadings.  That started a cascade of negative stories and investigations that have resulted in the FDA action and Walgreen’s departure.  There is only one solution to the bad news.  Fix the problems fast, whether or not one uses the micro technology, and report accurate results.  Either that, or watch the company disappear in a short time.

Lack of transparency in a business breeds rumors and misperception.  Consider this case.  Apple is hiding the results of its watch sales.  There is no good reason for the company to do so unless expectations have not been met.  Hence, the obvious conclusion is that its watches are not selling well and might be a commercial flop.  If they are a success, why should Apple hide?  Citing competitive reasons is not enough to convince anyone for long.  If they aren’t successful, Apple owes it to its shareholders to let them know.  As it was, the news for the company yesterday was not wildly good as it has been for quite some time.  News that its iPhone sales may have levelled off hit the market hard, but the company still performed well overall.  It still doesn’t excuse Apple for failing to report its watch sales.

This survey is discouraging.  It reveals that nearly half of companies that gather competitive intelligence rarely act upon it.  They have the tools to learn about the marketplace but they aren’t using them.  One shouldn’t be too surprised.  It is difficult to listen when one is convinced that he is ahead of the competition.  I saw this long ago in a high-tech company that was losing market share rapidly.  No one in top management paid attention to the marketing department’s reports, so when the company went off the cliff, management was caught unaware of what had happened.  Listening is humbling.  One is rarely as good as one thinks, and areas of perceived strength can be shown up as weaknesses.  Yet, honest CEOs find out what is happening in the marketplace.  They listen and decide on what to do with a picture of the whole field of competition.  They are inevitably practitioners of public relations in the best sense whether or not they have a PR department.

One difficult PR problem is uncertainty, particularly when it deals with management.  Consider this case.  The CEO is out ill and there is no time scheduled for him to return to work.  Yes, there are interim leaders but they can’t make major decisions.  Valeant hasn’t helped itself by staying silent on the CEO’s condition.  This only heightens uncertainty and fosters rumors.  It doesn’t help investors either who don’t know whether to stay with the company or to dump the stock.  PR at least should indicate publicly the progress of the CEO in returning to health, but the company sent a two-paragraph note to employees, which was leaked to the media.  This may be the way the CEO wants it, but it only heightens uncertainty.

PR practitioners are used to the irrational in daily affairs.  Commodity traders aren’t, but that is what is happening to them in the oil market.  Irrational price declines have entered a territory in which no one is sure where the bottom might be.  The interesting part of the fall is that it isn’t retail investors who are panicking in the market but hedge funds and experienced traders.  Supposedly the homo economicus would see price and demand and act rationally, but that isn’t the case.  Markets are moved by raw fear.  As experienced hands in dealing with irrational events, we can say to oil traders, “Welcome to the club.”

Volkswagen is saying that it cheated on exhaust emission tests in the US but not in Europe.  Who will believe them?  The company is about to learn the painful lesson of credibility.  Once lost, there is little one can do to win it back other than transparency and time.  Volkswagen will have to be extra diligent in the future in reducing emissions and may need a government presence in its engineering department to assure regulators that it is developing power trains that meet standards.  The company has so compromised itself that anything it does voluntarily may be met with skepticism.  It is a hard position to be in but Volkswagen did it to itself and has no one else to blame.