Just the facts, ma'am.... well, almost

CEO responsibilities rise above fact-checking speechwriters’ illustrative statements. And to attend to their higher duties without being menaced by minor issues, executives deserve knowing that their wordmongers get it right — otherwise the boss’s credibility gets dinged.

And no less a symbiotic relationship exists between President Obama and his own word crafters.
Nonetheless, as we all know by now, Obama is fond of entertaining tales and phrases. He evidently believes they contribute to his ‘ordinary man’ quality while elevating the mundane or simply tedious to the palatable.

Therefore, in addressing the joint session of Congress about both the American auto industry disaster and the ever-resilient American spirit, Obama once again entertained us with such an informative statement: "I believe the nation that invented the automobile cannot walk away from it."

While a handy turn of phrase, it is not correct.

The Library of Congress credits Germany with inventing the automobile, according to USA Today’s James Healy. And a Diamler AG spokesman says, “It's a fact that Daimler invented the car.”

All of this reminds us of another executive over-reacher, former Vice President Al Gore, who told CNN in 1999 that, “I took the initiative in creating the Internet.”

When Today's Healy asked the White House about the error, a presidential spokeswoman, Jen Psaki, challenged: "There may be some question about who invented the car, but make no mistake, we still make the best cars right here in America." [We don't think J.D. Power agrees with that, but we may be wrong.] 

The White House aide suggested that Obama was encouraging Americans "to remember our rich history of ingenuity."

Which brings us to another fundamental of executive communications: Admit mistakes, and demand that your lieutenants do, too.

Attempting to rewrite history doesn’t work, and is completely contrary to the notion of learning from one's mistakes and moving on.

Of course, we could take the approach of William Godwin, who pleaded in his 1797 “Of History and Romance: ”Dismiss me from the falsehood and impossibility of history, and deliver me over to the reality of romance.”

PS: One final thought on facts and accuracy: Dragnet's Sgt. Joe Friday is often credited with the phrase, “Just the facts, ma’am.” Close. Actually that exact sentence appeared in a 1953 Stan Freberg spoof of the cop drama. The accurate Dragnet phrase was, “All we know are the fact, ma’am.”

Business communication must address crisis realities

You will need to recalibrate and refocus your business communications based on “a new logic” defined in a Wharton Business School study just released, which suggests the end of conspicuous consumption and the notion of luxury as an entitlement.

The severity and uncertainty of today's economic crisis will be more pronounced and last longer than the outcomes of other post-Depression downturns. While spending will resume, Wharton says, it will be “without the vigor” characteristic of the roaring 2000s.

Wharton marketing professor Wesley Hutchinson says the Great Depression “changed consumer behavior and attitudes for a generation," and set a “precedent for a very large shift" to come from today’s economic crisis. These new behaviors include the following.

• Consumers will learn to become more frugal.
  
• Conservative spending practices “are likely” to become a post-recovery standard.
  
• Bad credit management habits will be replaced by an “overextending” wariness.
  

Consumers who “learned to trade up when times were flush are now learning to trade down. They realize they were wasting money on higher-priced goods and services.” They are finding a new sense of well-being in becoming more discerning shoppers. "There will be more of a premium placed on seeking value," says Wharton marketing professor Stephen Hoch.

This will not be an ephemeral shift. Consumers won’t “go back to spending like they did, at least not anytime soon," Erin Armendinger, managing director of Wharton's Baker Retailing Initiative.

The consumer mood is clearly downbeat, says Paco Underhill, author of “Why We Buy: The Science of Shopping.” " The level of depression is pervasive. This is a very dark period," which is defined by income security rather than income, and broadly falls into three consumer groups.

• Lost their jobs and are downwardly mobile, crosses social lines from the Wall Street banker to the GM worker. "This is traumatic.”
  
• Not at immediate job-loss risk, but friends have lost jobs. They are cutting back; take pride in comparison shopping.
  
• Relatively untouched: have paid-off mortgages, portfolios may be down sharply, have adequate cushion. Cutting back because conspicuous consumption seems like bad manners.

The changing consumer psychology also cuts across age groups.

For the sub-30-year-old Generation Y, who “believe spending is limitless…. This is the first financial trauma of their lives…. They have no idea of budgeting."

For the 30-to-45 Generation X, the decline in housing values is the challenge.
Baby boomers also are caught by the challenged of collapsing housing values. "They forgot to save, and thought their houses were doing the saving for them." Their expectations for retirement will be downscaled.

The way to cope psychologically with these changes is for each group to understand that “no acquisition in life that is transformative…. Nothing changes you into somebody you weren't before that purchase happened," Underhill suggested.

The 'Communications Impact' charted

A modest "Obama bounce" was seen in the Dow during the days immediately after the President's inauguration. However, once in place, the President's plans and non-plans began to emerge, and the notably unsentimental and apolitical Wall Street communicated clear dissatisfaction. Pundits and pols alike expressed their belief that Treasury Secretary Tim Geithner's non-plan recovery presentation was precisely the wrong communications package; it was a plan to have a plan to be announced later, but not a plan as expected. 

To see graphic representation of Obama's dramatic impact on the stock market, click the chart below and get a larger image.

Then, to add to the confusion, Sen. Dodd said live on Bloomberg TV: “I don’t welcome that (bank nationalization) at all, but I could see how it’s possible it may happen…. I’m concerned that we may end up having to do that, at least for a short time.” 

Almost immediately after Dodd's comments, Bank of America and Citigroup shares tumbled, and Treasury felt compelled to issue a brief statement saying the President’s plans did not include bank nationalization. That statement, however, was not all-inclusive or definitive. Confusion prevailed and stocks fell further. 

The White House attempted to counter the impact as Obama spokesman Robert Gibb told the media, "Let me reassure as best I can on banks. This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring they are regulated sufficiently by this government. That's been our belief for quite some time and we continue to have that." Stocks came off of their lows following these comments.

Unfortunately for American individual and institutional investors, the business of communications and effective performance of the communications function both were failures.

Sen. Dodd's communications DISASTER hurts Americans

The U.S. may have to temporarily nationalize certain banks, Senate Banking Committee Chairman Christopher Dodd said Friday in an interview on Bloomberg Television. The headlines sent shares of Citigroup and Bank of America down more than 20 percent on fear they could be involved in any such nationalization plan, reported ForexTV.com.

The market overall tumbled further in its current free fall following Sen. Dodd’s comments.

Dodd said on Bloomberg TV: "I don't welcome that at all, but I could see how it's possible it may happen…. I'm concerned that we may end up having to do that, at least for a short time."

Dodd did say that the Obama Administration is doing what it can to avoid such action.

With market uproar still sounding, CNBC’s Steve Liesman contacted Treasury, which contradicted Sen. Dodd and assured the business reporter that “As Secretary Geithner has said, we will preserve a financial system that is owned and managed by the private sector”

Does Obama have any control over this Democrat-majority Congress and its outspoken Sen. Dodd. Obviously not, and the miscommunication presented global financial markets are costing investors of all strips enormously.

Financial crisis exposes communications breakdowns

“The force and speed of the global downturn have sent most companies reeling, and many senior managers have not yet figured out how to respond,” according Booz & Company research among 800 global managers conducted in December, 2008.

While that may not be surprising, a “significant lack of confidence in senior leadership’s strategies” is disturbing, and suggests the need for greater C-suite outreach among key stakeholders, namely employees, customers and investors. The numbers:

• 34% of respondents are “skeptical of plans being put forth by senior executives.”
  
• 51% of managers not reporting to the C-level manager expressed similar doubts.
  

The Booze&Co. report concludes that these numbers may result form:

• “Executives inability to communicate the elements of their plans,” or
  
• “The plans simply don’t resonate with many of the people who must make them happen.”
  

The study suggests the existence of a significant gap between logical actions and actual actions of senior executives, which is creating a world view that “isn’t always realistic.” Booz researches suggest three steps to remedy this problem.

• First, executives should get “an accurate read” on their business environment and their company’s relationship to it.
  
• Second, they then must pick an appropriate response to the situation, thus “there are many different ways to strengthen the balance sheet….”
  
• Finally, essential to regaining wary stakeholders’ confidence is effective communications and decisive action.
  

[The full study is available at the Booz&Co. Web site.]

The KISS that never fades

“When everyone else suffers from over-complexity, there is a market for products and services that simplify life” Rosabeth Moss Kanter writes in the current editon of the Harvard Business Review.

The noted Harvard Business School professor cites several examples of businesses that became too complex and suffered as a result. The one that all of us can all relate to is P&G’s Crest toothpaste options; which one to choose? Basic, whiter, tarter control, gum disease? Ahah! P&G simplified by creating Crest Pro, which combines all the benefits into one product.

However, Prof. Kanter asserts that “simplification is not the norm, and that's a problem.” Unnecessary complexity, she believes, has contributed to the global economic meltdown, the failure of GM’s 47 brands, Bernie Madoff’s faud, and out-of-control American healthcare costs.

[In contrast to GM, Prof. Kanter points to Ford Motor Co., which “started its 'One Ford' campaign to integrate its international units and simplify its global structure. Ford was profitable despite industry woes in the first part of 2008 and did not require government assistance.”]

Prof. Kanter’s insights on business complexity translate perfectly to business communications and stakeholder outreach. The communications example we find always compelling is that of great American literature: Hemingway is more interesting, understandable and compelling for most readers than is Faulkner.

[Read Rosabeth Moss Kanter’s full HBR article on business complexity.]

Communications vacuum impairs judgment

Operating in a vacuum — where the only input you get is from animals of your own stripe — will surely produce skewed perceptions of the dangers that lurk in your jungle. Wall Street executives and the nation’s largest bankers have been swinging from their own trees for so long that they have failed to perceive all of the threats around them — those in the larger American habitat.

This apparent lack of clear corporate perception promises potentially dire consequences for these executives, their companies, and the rest of America.

Effective corporate communications are based, in part, on a dialogue among executives and stakeholders to gain insight and support.

As we have said in previous posts [see Cessna], executives who manage without the knowledge such dialogues provide do so at their own peril — and now everyone else's, too.

Such an outcome has emerged “buried deep inside the $787 billion economic stimulus bill,” the Times reports [1-15-09]

“Much tougher” than proposed by Treasury Secretary Tim Geithner, the very restrictive compensation aspects of the bill are the handiwork of Connecticut Democrat Sen. Chris Dodd, who seems to enjoy his ability to smack around business leaders on behalf of his constituents.

“The decisions of certain Wall Street executives to enrich themselves at the expense of taxpayers have seriously undermined public confidence,” Dodd said. “These tough new rules will help ensure that taxpayer dollars no longer effectively subsidize lavish Wall Street bonuses.”

“These tough new rules” also may have some negative unintended consequences, according to both Administration and outside experts.

First among these is a brain drain in the financial industry. The top talent, the best traders and managers may flee to hedge funds and foreign banks not constrained by Congressional action.

“These rules will not work. Any smart executive will… get another job,” compensation consultant James F. Reda told the Times.

Second is the likelihood banks and other financial entities covered by the bill can simply increase executives salaries.

“About the only way to address these limits is to pay large salaries,” according to Michael S. Melbinger, an executive compensation lawyer at Winston & Strawn in Chicago. “There’s no pay for performance in this,” which is what bonus are all about and help ensure quality output.

And finally, “at some point, you begin to wonder: has the government given up on these companies anyway?” asked Alan Johnson, a compensation consultant and advisor to Wall Street banks. “Why would the government or White House want to go along with that unless they have come to the conclusion they will have to nationalize these firms anyway?”

Hearing these argument against Sen. Dodd’s addition to the rescue bill makes one wonder if the CT Democrat is hastily helping along the President’s effort to redistribute wealth in America — ushering in The Socialist Era in America.

In any case, bankers operating in a corporate information vacuum have brought the nation to this uncomfortable situation.

[Read The New York Times' story on this Congressional action.]

Cessna's corporate blind spot: "Who, me worry?"

Cessna simply does not get it.

That the public and the media pilloried CEO’s of Detroit’s Big Three automakers for flying hugely expensive corporate jets to DC so that they could personally beg Congress for billions of taxpayer dollars was less about the private aviation and more about executive judgment.

When the nation, and indeed the world, is experiencing the worst financial crisis since the Great Depression 70 years ago, and the auto companies are losing tens of millions of dollars daily, fiscal excess in any form is the last thing they should exhibit to stakeholders.

Yet Cessna’s “Rise” ad and PR campaign debuted in The Wall Street Journal and other business and trade publications this week. And the “Rise” challenge to executives plays not to their fiscal prudence and thoughtful and prescient management, but to unvarnished ego and raw machismo.

One segment of the Cessna ad reads: "One thing is certain: True visionaries will continue to fly. Because in tempestuous times, leaders recognize it's not about ego. Or artifice. It's simply about availing yourself of the full range of tools to do your job.”

By denouncing ego, Cessna is in fact catering to it, just through the back door.

"Timidity didn't get you this far,” the Cessna ad states. “Why put it in your business plan now? In today's corporate world, pity the executive who blinks."

Explaining why he approved the campaign’s lead ad, Cessna CEO and president Jack Pelton told Ad Age, "It's time for the other side of the story to be told" referring to the denunciation the Big Three got for their beggars’ fly-in.

And corporate communication VP Robert Stangarone so eloquently supported his boss saying, "We have a big dog in this fight. We feel like we must take a stand."

No one at Cessna, or their ad agency, seems to understand. Wise use of private aviation by corporations is widely accepted as good business and financial policy, when done properly:

• When executives regularly visit multiple clients in geographically dispersed areas over short periods of time; 
  
• When a corporate shuttle is a more cost efficient way to move employees regularly among multiple facilities than high cost, last minute commercial tickets;
  
• When CEO safety is a concern.
  

Lots of valid reasons justifying private aviation can be made, but Cessna did not make them. Therefore, we must conclude that Cessna did not make a valid case because it does not understand the practical business and public relations issues at hand.

It was much easier for Cessna to reach for the corporate jugular, and challenge CEOs with the implied question of what sort of weak-kneed, indecisive sissy executive are your to give up your magic carpet of privilege!

This insensitivity to stakeholder reaction — a not unjustified reaction — is the kind of behavior that diminishes public confidence in “big business” and leads to public outcry for increased regulation. Too bad Cessna is only adding fuel to the fire.

[Read the full Cessna campaign story in the Ad Age online edition.]

Corporate taglines can say a lot with a little

Tag lines can say a lot about a corporation, and shouldn’t be taken lightly – despite their diminutive presence. At times, they can even echo the vision and soul of a company.

Take for instance the venerable technology offspring of Bill Hewlett and David Packard. HP long used the simple tagline “invent,” with a lower case “i” and it established the entire tone and mission of the company.

In recent years, however, “invent” is seldom used, perhaps indicating a confidence, like Apple, that HP simply says it all. Perhaps it says something about the company’s new direction.

Apple, from the beginning, has had no tag line. “Apple,” indeed, does seems to say it all. The brand is iconic, recognized worldwide, synonymous with innovative usefulness. That’s a tribute to decades of [almost always] clear focus delivering to customers innovative, easy-to-use technology that is helpful.

GE used “bringing good things to life” for ages. It was comfortable, comforting and very 1950s. We liked it. Then GE became a ginormous conglomerate, and today the tag is “imagination at work.” That covers all the bases, saying everything and nothing simultaneously.

Toyota’s tag is a double entendre intended for both consumers and investors; it is “moving forward” in lower case [with a tiny red arrow pointing right in case you'd confuse the direction in which their primary markets read: left to right, not right to left]. Low key, steady and reliable, dependable and not frivolous. What more do you want in a car or a company.

Walmart, after a long and painful agency transition, has moved from “Always low prices” to “Save money. Live better.” They’ve also – thankfully! – moved away from “Wal-Mart” to “Walmart.”

It appears that Walmart has changed pricing policies, too. From Maine to Florida, we’ve noticed very fluid same-store, same-product price fluctuations. For instance, such high volume, wildly-floating-priced consumables as soda drinks can vary up and down as much as 30 percent overnight.

So, tag lines say a lot. “Save money - Live better” has very little to do with “Always low prices.” But, gee, they have to pay those hefty ad agency fees somehow, right?

Go, Team O'Bama! Go!

Business as usual for President Obama is getting off to a rough start, with his Cabinet nominees not paying their taxes - and apparently not telling their prospective boss. [Ooooh! That's real embarrassing.]

And the folks on Wall Street perceiving his economic recovering package as something rather like a Mary Poppins promise.

And Illinois Gov. Rod Blagojevich trying to sell the ex-Senator's Congressional seat to the highest bidder.

And the Muslims, at least in Egypt, writing him off as just so much talk [See post below].

Well, it's not been so promising a beginning for the Senator from Chicago. So, we thought he might be helped along if he had a bit of luck o' the Irish. Here's to ya' Barack!

A plan to have a plan is not an acceptable plan

Markets and businesses don’t like uncertainty. That's a blinding glimpse of the obvious that any corporate executive or investor relations officer knows all too well.

So why was it that Treasury Secretary Tim Geithner laid out a financial rescue plan that had about as much specificity as a sky full of cirrus clouds?

The NYT’s first news report on the secretary’s news conference “plan” announcement stated that “Mr. Geithner left major questions unanswered about the workings of many components of the new plan, and officials acknowledged that they had yet to decide many of the thorniest issues.”

MarketWatch quoted Ryan Larson, head equity trader at Voyageur Asset Management, as saying, “We’re not impressed, and I don’t think the market’s impressed either…. It’s clear the administration is still trying to work on something concrete. I think the market sensed that, too.”

The stock market started its nose dive almost as soon as Geithner began speaking. At its close the Dow was off 381.99 points, 4.6 percent, at 7,888.88.

As we have said in earlier posts, the Administration simply cannot jawbone success; it must have real, credible, immediately actionable plans. A plan to have a plan is not an actionable plan.

"I screwed up." Well, that'd be right...

In business communications, credibility is the foundation for all other actions. If your clients and other stakeholders cannot rely on the integrity of your statements, how can you expect them to believe in and buy your products and services. 

A sage CEO once told us that among the various maxims he lives by is the notion that, "If I can't trust you with the small things, how can I trust with the big ones." All of which makes the observations of the AP’s Calvin Woodward even more interesting. 

Woodward this morning offers a reality check on the President’s continuing effluence of superlatives. We find Woodward's observations compelling if not reassuring.

OBAMA — "Not a single pet project…not a single earmark" appears in the President’s $800 billion economic recovery package.

THE FACTS — The program passed by Congress contains the following items that smell an awful lot like special interest projects, which is the definition of an earmark, pork, or a pet project.
• $2 billion for a clean-coal power plant with specifications matching one in Mattoon, Ill.
• $10 million for urban canals
• $2 billion for manufacturing advanced batteries for hybrid cars
• $255 million for a polar icebreaker and other Coast Guard items
• Of course, there is Obama’s statement earlier in the day to his friends in Elkhart. IN, that his plan would benefit the northern Indiana town with work on "roads like US 31 here…[and] that new overpass downtown."

OBAMA — During his press conference, the President said the recovery plan would create “four million jobs,” his highest definitive statement yet. In Elkhart, Obama said that the plan “will save or create 3 million to 4 million jobs over the next two years."

THE FACTS — “Job creation projections are uncertain even in stable times, and some of the economists relied on by Obama in making his forecast acknowledge a great deal of uncertainty in their numbers," Woodward reported.

“The president's own economists, in a report prepared last month, stated, ‘It should be understood that that all of the estimates presented in this memo are subject to significant margins of error.’

“Beyond that, it's unlikely the nation will ever know how many jobs are saved as a result of the stimulus. While it's clear when jobs are abolished, there's no economic gauge that tracks job preservation.”

OBAMA — "They'll be jobs building the wind turbines and solar panels and fuel-efficient cars that will lower our dependence on foreign oil and modernizing our costly health care system that will save us billions of dollars and countless lives."

THE FACTS — The economic stimulus bill would allocate about $20 billion to help hospitals and doctors transition from paper charts to electronic health records for their patients.

“Research has shown that in some instances, electronic record keeping can eliminate inappropriate services and improve care, but it's not a sure thing by any means. ‘By itself, the adoption of more health IT is generally not sufficient to produce significant cost savings,’ the Congressional Budget Office reported last year.”

OBAMA — "I've appointed hundreds of people, all of whom are outstanding Americans who are doing a great job. There are a couple who had problems before they came into my administration, in terms of their taxes. ... I made a mistake. ... I don't want to send the signal that there are two sets of rules."

THE FACTS —Two of his appointees, Tom Daschle, tapped for HHS secretary, and Nancy Killefer, planned to hold the post of Chief Performance Officer, both removed themselves from consideration because of tax payment failures.

Treasury Secretary Timothy Geithner made it through Senate confirmation hearings – before Daschle and killefer – despite his admitted failure to pay $34,000 in taxes, which he quickly handed over to the IRS.

During those difficulties, Obama admitted that he "screwed up" in making it seem to Americans that there are two sets of tax compliance rules – one for the very top VIPs, like Geithner, and another for not-quite-so-high VIPs and everyone else.

OBAMA — "We also inherited the most profound economic emergency since the Great Depression."

THE FACTS: — Hopefully the current situation won’t turn out to be the “catastrophe” that Obama predicted it might happen. Even so, based on the government's own unemployment figures, this is not yet the worst situation since the depression.

• In January, unemployment climbed to 7.6, up by 0.6 percent from the month earlier.
  
• The figure in June 1992 was 7.8 percent.
  
• In November and December 1982, the jobless rate was 10.8 percent.
  
• During the Great Depression, estimates are that joblessness reached 25 to 30 percent.
  

Oh, Mr. Prez! So soon, so much, yet so little

In Media Training 101, executives are told that the most effective means of communicating with the press -- and thus the public -- is to present short, simple, direct statements regardless of how complex the question may be. The more you talk, the more you elaborate, the more detail you provide, the greater your likelihood of getting something wrong. And, surely, the longer the answer, the less the likelihood your audience will grasp the one important point you are seeking to get across.

We know that President Obama has taken Media Training 101, but he must not have listened. Perhaps it was to long. 

The result was exhibited tonight. The president took seven minutes to answer to each of his first three questions. 

Liberal apologist Chris Matthews thinks this long-windedness helps the public understand Obama's thinking process. We believe it actually confuses issues.

Obama will have to change his manner of communicating if he expects to be fully understood for the facts, and not just the emotion. His Baptist preacher style -- filled full of elaboration and allusion -- is not an appropriate manner for the nation's Chief Executive.

With such unwillingness to grapple with these press conference basics, we wonder if he can he control Congress and the pressures around him? Or will House Speaker Nancy Pelosi politely let the Prez ramble on, then go off and do what she wants, which now seems to be the case.

By contrast, David Gergen on CNN stated that "eight or 10 days from now" Obama's long winded approach may be successful, the markets may love it, and we'll all be asking "How'd he do such a masterful job," or something like that. 

We don't think so. But we hope we are wrong. Even so, we don't believe Obama convinced Wall Street, though Main Street may have bought it. The folks on Wall Street are notably unsentimental about their money, and they react to the expectation of performance, and sometimes even performance itself.

The real measure of persuasion will come in Wall Street's reaction to Tim Geithner's first/public presentation of the next recovery plan PLAN. That comes tomorrow, Tuesday. Market movement will be a credibility barometer for the plan's perceived efficacy.

Presidential substance over statement

In government, as in business, credibility is everything. Therefore, an ancillary note about Obama’s speech-ifying and the power or rhetoric, or lack of same, is justified.

Over the past several months, news reporting has suggested that Muslims worldwide perceived a possible new day when with the election of a non-traditional American president. It appears that not all expectations for the measure of "change" are coming to fruition, at least so far. One observer and commentator on the effectiveness of Obama's substance over stance says a lot.

Egyptian author Alaa Al Aswany, writing from Cairo in the NYT, believes that - despite great expectations to the contrary - Obama’s “brilliantly written inaugural speech did not leave a big impression on Egyptians. We had already begun to tune him out.”

Why? Because mere jawboning does not cut it in the world of global realities.

Aswany wrote that “No matter how many envoys, speeches or interviews Mr. Obama offers to us, he will not win the hearts and minds of Egyptians until he takes up the injustice in the Middle East.” NYT, 2-8-09: “Why the Muslim World Can’t Hear Obama.”

Is Obama wearing thin so soon?

Times columnist Frank Rich wrote ["Slumdogs Unite"] on Sunday, Feb. 8, that “Obama was blindsided by the savagery and speed of (Tom) Daschle’s demise,” which included Times and WSJ editorials calling for him to step away from his HHS Secretary nomination.

Rich suggested that Obama may be melding into the Washington insider's environment of privilege and power [and lack of perspective], a group that still “doesn’t get it.” Rich explained that “there are simply too many major players in the Obama team who are either alumni of the financial bubble’s insiders’ club or of the somnambulant governmental establishment that presided over the [current financial] catastrophe.”

We think that Obama risks wearing thin with Americans on yet another characteristic, his paternalistic tendency to use broad pejorative superlatives. Make no mistake that we agree that current circumstances deserve the gravest of gravitas, but Presidential verbiage needs to be prudent and promising, not stoking the fires. [Stoking the fires should come in the background with Congress.] For instance...

Obama officials told Citigroup officials to “Fix it,” referring to purchase of a $50 million corporate jet. They did so.

Obama himself condemned John Thain’s doling out of billions in Merrill Lynch bonuses as “shameful” and "outrageous." But, the bonuses remain in recipients’ accounts.

While we feel these characterizations are on the mark, we’re beginning to sense that the President is acting a bit like Pappa Bear, passing judgment on the behavior of his offspring.

As momentarily refreshing as some of Obama’s comments may be, we’re not so sure that Americans want to be treated like the 10-year-old school girls the President has at home in Chicago. 

[White House photo: Pete Souza]

PR is what you do, not what you say...

The adage in the communications biz goes that “PR is what you do, not what you say you do,” and so it is with former Senate leader Tom Daschle, who today withdrew his name from nomination as Obama’s Secretary of Health and Human Services.

In withdrawing his name, Daschle confirmed that he failed to pay $128,203 in back taxes on consulting income and use of a car service.

[Daschle is the second Obama nominee to have forgotten to pay his taxes. Treasury Secretary Timothy Geithner admitted last week that he overlooked paying $42,702 and back taxes and interest. Obama's intended "performance office," Nancy Killefer also withdrew her candidacy today due to problems with her household tax filing. Killefer is an executive with McKinsey & Co. and oversees their management consulting for government clients]

Daschle’s predicament is very instructive on the PR front. With missteps of judgment, sincere apology is always the first move in attempting to recover. But such utterances must be supported by good behavior, not just good words.

When Daschle apologized for his lapse of taxable memory, he said, “All of my life I assiduously tried to pay my taxes in full and on time…. I deeply apologize…. I would hope that my mistake would be viewed in the context of 30 years of public service.”

The only problem is that his “assiduously trying to pay” his taxes does not seem to true up with his own earlier admissions of omission of previous tax payment delinquencies.

Daschle filed amended tax returns for 2005-2007 to pay $140,167 in back taxes and interest. This is coming close of a pattern of behavior.

A sincere apology for a single misstep often works. However, it is very difficult to believe that a public servant of Daschle’s ability can actually overlook the taxable nature of consulting fees – which amount to three times the median US household income of $50,000. This is where the admitted facts trump mea culpas, and PR proves to really be what you do, not what you say you do.

Bankers learning to communicate

The first rule of communications is to gain understanding. If your audience does not understand what you are saying, no amount of effort will convince them that your way is the right way or your product is the right product. Thus emerged the simple dictum of “Keep it simple, stupid,” the KISS theory. Based on this, the banking sector has a real communications problem.

Most people don’t really understand how the banking system works or what the people who are its cogs and gears actually do. Americans, and others, only know that it is broken, and the jerks who broke it are getting paid a fortune from taxpayer funds. 

Thus, the appearance of the latest let-me-tell-you-what-I-think t-shirt: “I Hate Investment Banking.” Not surprisingly The Times reports that with its “catastrophic loss of cultural cache,” the financial industry’s new role is that of “national pariah.” And justifiably so.

After all, the folks who were paid those huge sums of money, were supposed to be the guards at the gate; they were supposed to be keeping away the wolves in sheep’s clothing. Instead, they were among the wolves and were, indeed, themselves wolves. Consequently, no one was at the gate and the wolves ravaged the system.

The enabler for Rule One is candor. And candor is essential in gaining understanding in any situation, crisis or otherwise. You have to deal with the true situation, not the situation the way you’d like it to be. 

However, at this point, it appears to us that the failed financial industry has yet to admit they were, and remain, the failed gate-keepers. They lack candor. Until this level of realization develops, no amount of effort at communications can achieve the goal of Rule One, understanding, among the bankers’ constituencies.