The brief background:  Amazon got into a bit of reputation trouble last week when they deleted books from people’s Kindle e-reader without notifying them (including, oddly enough, 1984).  This was the result of the books being bought from an Amazon seller that did not have the right to sell it.  However, consumer sentiment was that this was a personal violation by Amazon and one that highlighted that you don’t really own them the way you own physical books (people asked if Amazon would have raided houses to take back books illegally sold?).

But then Mr. Bezos comes out with an apology so straightforward, it would be hard to doubt both the sincerity of the apology or of the commitment to doing better for customers:

This is an apology for the way we previously handled illegally sold copies of 1984 and other novels on Kindle. Our "solution" to the problem was stupid, thoughtless, and painfully out of line with our principles. It is wholly self-inflicted, and we deserve the criticism we’ve received. We will use the scar tissue from this painful mistake to help make better decisions going forward, ones that match our mission.
With deep apology to our customers,
Jeff Bezos
Founder & CEO
Amazon.com

The apology was issued on the Kindle forum and customer feedback on the forum was overwhelmingly positive.  You can see it here.

This is a great example of what makes a great customer service reputation – a combination of the right communication and business action..  It’s not that the service is perfect as that is rare, it’s that the company is honest about their mistakes and aggressive about fixing them.

There were engineers in almost every country, and way too many product people. We had one product management person for every three engineers,We had a lot of people telling engineers what to do but nobody fucking doing anything. Excuse me. I knew that would slip out one of these times. (click here for the audio)

Her honest approach to communications (talking the way she talks, not the way someone trained her to talk) seems to simply reflect her approach to business – no one doubts her sincerity and seriousness because she’s honest to a f***ing fault about getting things done.  Here’s a good outline of her style at GigaOm.

I’m one of the (few? many?) public relations professionals cheering on this style of communications.  While it’s often not appropriate, it is how people (including executives) talk in the real world and that needs to always be kept in mind.   When an executive doesn’t use their natural language style but instead gets caught up in PR speak (yes, I said it), audiences detect and that affects the trust factor.  People are more likely to believe someone they can relate to and people easily related to people who talk like they do.  

So have I actually told an executive it’s OK to curse?  Actually, yes (ping me as I’d rather not call out that executive…but they took my advice and it f***ing worked).   While executives should stay on message, they should also communicate messages in their natural, honest style.  And if that f***ing means dropping a lot of f***cking f-bombs, then f***cking do it.  You’re more likely to be believed.  And from what I’ve seen, no one doubts that Carol is seriously focused on fixing broken things f***cking fast.

You can find more examples of Bartz’s “real world communications” style at Alley Insider here.  

In a recent earnings call with Wall Street analysts, Mr. Bass was reporting a lousy last quarter for the last year and a murky, at best, outlook globally.  When an analyst, fishing hard for good news, asked what regions were immune to the global slump, Mr. Bass made it clear he would not try to spin bad news into good:

Well, I think Antarctica has been relatively immune, maybe Greenland, as well, although not Iceland, as we all found out.

Enough said.

(note: I first picked up on this in Fred Hickey’s High-Tech Report and you can get the full background from Barron’s).

Bill George, former CEO of Medtronic; and professor at the Harvard Business School

[Siemen’s] competitors should have come out and stated their own anti-corruption principles…CEOs need to face reality…CEO’s often go into denial, and that’s the worst thing they can do.  it’s a huge mistake to hire a PR firm and ask it to restore your image – Bill George, former CEO of Medtronic and currently a professor of management at Harvard Business School.

Mr. George not only provided some very good PR counsel, he also highlighted a reputation problem with the PR agency industry’s reputation (yes, ironically).   Hiring a PR agency is often seen as a way to order a good reputation.  As this quote shows, smart executives know that is not the case.  

PR counselors, and in particular agency based executives, need to be consistently clear that reputation is not a function of communication, but is a function of communicating business action.  Mr. George understands this, but obviously does not see PR agencies as a source of this type of business counsel.

The level of respect for an agency’s work always goes up when clients see that clear, specialized business counsel, not simply PR counsel, is being provided.   Bill George’s quote is a strong reminder of the importance of this approach.  

Of course, for this to happen agencies have to start hiring based on strategic business smarts and not simply tactical smarts.  But that’s or another post…

P.S., I was recently asked why, as an PR agency owner, I would post advice to other agencies.  Simple, these are PR industry issues which, if solved by more agencies addressing them, would result in more and better business for all of us.

While Thaine may well be correct in thinking that his decision making may have saved the bank, he is missing the larger picture…and maybe, for once, the board, which denied the request, is not.  Thaine is obviously not recognizing the reality that 1) any bonus request is seen as being tantamount to corporate fraud; 2) the leadership role of the CEO is to set a public example and show sensitivity to the economic situation; and 3) the management role is to save as many jobs as possible (laying off people while requesting a bonus does not seem to be consistent with that goal.  So while Thaine certainly deserves a pat on the back for realizing Merrill needed to be sold, he seems to have fallen short in other critical decision making areas.  And one must wonder that if a CEO that can’t see where the world is today, should they be CEO in 2009?

1. [Businesses] think they can tell portions of their story, leaving out the personal, messy, or confusing parts, and still have the media (and the public) consider their comments "truthful." The problem is, whatever you leave out of your story will be filled in—if not with facts, then with conjecture, rumor, or opinion. Is that unfair? It doesn’t matter. The media’s job is to tell a complete story. Your job, if you’re in the public eye, is to protect yourself by helping them get it, warts and all, with your perspective attached every step of the way.

2. Have you transmitted the same message to everyone? If there is one mistake that practically guarantees negative publicity, it’s adjusting your point of view for different audiences. Barack Obama, for instance, took a barrage of criticism when, after praising the values of religious worship and gun ownership at Midwestern rallies, he derided the same at a private fund-raising party in San Francisco.

3. Finally, have you taken your media coverage into your own hands? Time was, the media had the last word. The Web made it so there are no more last words. Sure, it can be used against you in a media firestorm, what with thousands of amateur news sites and blogs. But that’s all the more reason to use the Web for your own defense, if not offense. Celebrities now speak directly to the public about rumors; companies are doing the same. Individuals who feel maligned now have this option. You may not be able to change the course of your media coverage to your complete liking, but at least you’ll have an active role in it—in your own words.

Yes, I know, there will be that political crisis management philosophy that says deny, point and blame and the legal approach that says “never admit wrongdoing.”  But this is about true leadership and faith in government.   Everyone assumes the government played a critical role in letting the markets get to this point.  So if politicians are not, on behalf of the government, willing to take responsibility, how are we to have faith in their ability to be responsible for leading the fix to this problem.

We teach our children to take responsibility for their actions as, by doing so, people are more likely to trust them to do the right thing the next time around.  If our leaders don’t event have a grade-school level sense of responsibility, how are we to trust them with a global-level economic solution?

Today’s New York Times covers Kohlberg’s partnership with the Environmental Defense Fund to improve the performance of the companies in which the private equity firm invests.  The move shows that being environmentally friendly is not simply a reputation issue but a bottom line business issue.  How the value of being an eco-friendly company may differ depending on the business – more sales for a consumer company, sustainable energy plans for a manufacturer – but the move by Kohlberg shows that there is real financial value to be found in being eco-friendly.  The result, first for Kohlberg and potential for their companies, a greener reputation.

This is the cart and horse lesson for companies.  Kohlberg and the Environmental Defense Fund did not first do a PR push to say how they will become green.  They announced a specific business move the commits the private equity firm to pushing its companies to be environmentally friendly in a way that has  positive business impact.  The PR driven reputation can then come from the business moves being made.

Hopefully, we will soon see examples from this partnership that provide additional lessons from corporate America.  Reputation does not simply result from a strong public relations and reputation management strategy, but from a strategy that is wrapped around real, substantial business moves.  If you’re in corporate communications the question you should be asking yourself is "would my company have me suggest a similar move or do a reputation evaluation of such a move that would be considered by senior management."  If the answer is yes, then you’re a business executive with PR expertise that sits at the table.  If the answer is no, then your are  PR executive waiting to execute what those at the table decide.

When you own the name of something so embedded in the culture of a country there is terrific opportunity to leverage the brand value.  The official Little League could simply seek non-paid permissions that enhance the value of the brand and present revenue opportunities.  For example, it could allow leagues to use the phrase providing commission is paid on any goods being charged and provided they meet certain guidelines to ensure both quality and fairness (e.g., abide by certain rules, etiquette etc).  The result would be stronger positive feelings toward the brand, new revenue opportunities and as American as apple pie.  Instead, the association will look petty, selfish and as American as petty lawsuits. 

(disclosure: I am a coach in a baseball league for children that was asked to stop using the phrase – we have as our lawyers have other work to do).

I was explaining the many non-gaming reasons to buy a Playstation 3 to a friend – ability to install another operating system, ability to play different types of media files, ability to upgrade etc – when he says, "I’m surprised.  Isn’t Sony all about closed systems and tight control over content?" 

"Well," I responded thinking out loud, "they are…or, were.   That’s why I swore off their music products.  But perhaps Playstation 3 is a new era of creating the best hardware package for consumers and not letting concerns from their music and movie executives water down a good customer experience. Maybe Playstation 3 is their way of saying ‘we’re back and more user friendly than ever.’"

Using what might be their most iconic product, Sony might be able to rebuild the brand of what was formerly their most iconic product – Walkman – and their general reputation in music hardware.   

It was early adopters (likemyself) that went out, tried products like Minidiscs and Sony CDs only to find they were hobbled by Digital Rights Management software (software that controls what we do with the content).  As a result, they quickly gained a reputation amongst the early adopter community as closed, restrictive systems that saw protection of content as a priority over good consumer design.

But the Playstation 3 has not suffered from this type of technology.  Instead, it is probably the most open gaming console ever.  Sony builds in the ability to install other operating systems on the hard drive with the likeliest systems to be opens source Linux systems.  If Sony pushes this capability as a message that this is a new, more open era, they can quickly gain a reputation as one of the more consumer friendly product producers.  In early adopter circles this may already be catching on, though I have not seen much evidence that Sony is pursuing it aggressively.

Either way, this is a good example of how product design can make, break and potentially make a reputation.  We shall see in the years ahead how this all plays out.