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Tuesday, May 31, 2011

Don’t Mess With the Little Folk


Urban Outfitters operates a couple hundred retail outlets worldwide offering a range of  kitcehy goods from housewares to shoes to clothing and more, under six brand names. Their appeal is to teens and twenty-somethings striving to be “Hip,” whatever that means these days. It is a remarkable success story launched by Richard Hayne (now worth $1.8 billion) in 1970 with a single store on the campus of the University of Pennsylvania.

According to a piece in the Huffington Post and other sources, Urban Outfitters is caught up in an intellectual property dustup with Stevie Koerner, a Chicago based designer selling her jewelry online. She has a line of handmade silver pendants, many in the shape of some of the 50 states, a few countries and several continents. They all have a heart cut out; she calls these her “World/United States of Love” line.

So one day a design similar to her New York State pendant shows up in an Urban Outfitters’ store. Not cool, thinks Stevie, but not much I can do about it. She tweets a complaint with her sad tale and soon a “Boycott Urban Outfitters” movement begins. Before long Twitter is trending heavy with the message and it goes viral worldwide. Unconfirmed reports indicate that Urban Outfitters pulled their version from the stores tout de suite.

This is not the first instance of a ripoff design showing up in Urban Outfitters’ stores. A year ago The Brooklyn Paper and The Village Voice ran stories about similar design ripoffs involving Urban Outfitters. The issue has not escaped Urban Outfitters; reportedly they are now asking suppliers if their designs have been “inspired” by others. Given Ms. Koerner’s recent experience that message hasn’t done much to cure the problem. Perhaps a plainspoken, “If we find that you ripped this design off from someone, we will make you eat it and you will never sell us another dime’s worth of anything” might do the trick.

Getting the ripoff of Ms. Koerner’s design out of Urban Outfitters is apparently just the beginning of a reversal in her fortune. A note on her website, www.IMakeShinyThings.com tells it all: “Thank you SO much for the support everyone! Orders will take a bit longer due to the overwhelming response to Urban Outfitters! Please give me 3-4 weeks to create and ship your items! Xo.” Seems that taking on the giant retailer has raised her profile and business is booming. Good for her!

In Tom Friedman’s Flat World the lesson for Urban Outfitters and others in a similar position –is– don’t mess with the little folk; they can organize an army of supporters and even make billionaires back down. The lesson for the little folk like Stevie Koerner –is– don’t take it lying down; use Twitter and all the social media to go after anyone who has wronged you. The message for the rest of us –is– it is a new day, a brighter, nicer, kinder, more ethical day.

Tuesday, May 24, 2011

WhisperGate


Things don’t sink much lower than having the guardians of reputation forgetting that reputation is their sole reason for existence. Despite what some believe, the vast majority of public relations practitioners are not a bunch of smarmy spin doctors. They value nothing more than their ability to be the “Canary in the Coal Mine,” sniffing out the slightest hint of an action that might damage the reputation of their company or their client.  

That’s what makes a blatant attack on Google engineered and carried out by PR giant Burson-Marsteller on behalf of Facebook so mindboggling. Tagged “WhisperGate” by the media –perhaps because of its resemblance to a nasty grade school rumor– it’s hard to understand how anyone thought this was a good idea. The fact that two guys who recently moved into the PR world from fairly senior positions in journalism were badmouthing Google to their contacts in the media makes it even harder to fathom.

What level of hubris made them think they could carry off this kind of nonsense? What journalist or ex-journalist would fail to see this going public and viral in the blink of an eye; as it did? Their phone calls were stupid; pushing their garbage in emails was insane. How long did they think it would take for someone to forward their own words to the world? Who did they think they were?

Of course we have no way of knowing how this all came about, or whose idea it was in the first place. We are not likely to discover how many others –alongside, or up the food chain– were involved. But it does lead us to take a look at Burson-Marsteller. A quick perusal of their history and website leaves one less than impressed with their ethical grounding. To their credit they swore off tobacco last year (2010) after shilling for Philip Morris and other industry players for years. Among other things, they set up what were made to look like independent scientific entities to cast doubt on the dangers of smoking.

They lay claim to crisis management credentials springing from the 1982 Tylenol tragedy in Chicago. In a carefully parsed paragraph they say, “Burson-Marsteller worked closely with Johnson & Johnson.”  To our knowledge all the smarts that have become the gold standard for dealing with this kind of catastrophic happening came solely from J&J. Burson-Marsteller certainly played no part in setting the course J&J chose.   

The Burson-Marsteller Google attack delivered a black eye to every public relations practitioner, the good and the bad. Sadly, the good guys have no way to distance themselves from the smarmy elements in their discipline. As Warren Buffett famously said, “It takes 20 years to build a reputation and five minutes to ruin it;” in this case for somebody else to ruin it. Burson-Marsteller will shrug off this despicable incident and go on to the next smarmy tactic, seemingly their only regret that they got caught. Meanwhile the good guys will suffer.

Wednesday, May 11, 2011

Reputation, Reputation, Reputation!


Harris Interactive rolled out their 12th annual Reputation Quotient® (RQ®) last week (5/2/11). They compiled the views of 30,104 Americans to determine what Harris describes as the “public’s positive perception” of  “the 60 most visible companies in the United States.” It is great news that overall these well-known companies have earned a dramatically improved image in this year’s rankings.

Google sits atop the Harris RQ® study for the first time. Certainly no big surprise given the company’s well-known drive to be good guys. It’s no surprise either to find the big banks at the other end of the scale with Goldman Sachs leading the race to the bottom. Actually, Goldman is the major loser across the board. They were buoyed slightly by a few of the study respondents who –can you imagine– saw Goldman as a good place to invest. In the same vein, however, Goldman was rated the very least likely to be recommended; probably by those investors Goldman hammered.

Goldman Sachs’ view from the sewer doubtless makes it hard for them to even see the top of the Harris Sixty. However, in the unlikely event that they should ever glance in that direction with a mind to improving their reputation, they might try practicing Google’s informal motto, “Don’t be evil.”

Actually, more companies than ever are striving and succeeding in bettering their reputation. The number of companies that attained the Harris “Gold Standard” RQ® score of 80 or above increased dramatically to an all-time record high this year. It almost tripled from 6 in 2010 to 16 in 2011. Three factors drove the reputations of these list toppers: transparency, ethics, and performance. This is the first time ever that there have been more than a handful of companies at this level.

There are ten companies that have scored above 75 for the last ten years or more. That kind of consistent reputation maintenance shows a true commitment to doing the right thing.  No surprises here: Johnson & Johnson, Coca Cola, 3M, Procter & Gamble, Sony, General Mills, UPS, FedEx, Microsoft & Kraft Foods. The 2011 study has 27 companies with an RQ® above 75, and a 28th just below that bar. While the number of companies scoring 80 and above grew dramatically, the number of companies that scored 75 or better was only up one this year over last from 26 to 27; about half of the Sixty.  The bottom half of the list seems to be made up of those who haven’t gotten the message that, “ethics works.”

In nearly every ranking you are once again looking at the same cast of characters–including the bottom feeders.Leading that gang Goldman Sachs is the least trusted company in the 2011 Harris RQ® Study. Sachs and four other big banks take half of the ten spots in the bottom rank among those respondents who say they would “definitely not” trust these companies. The other five are a dog’s breakfast of oil, chemical, and cable television companies along with one of the biggest insurers on the planet, AIG.

Tuesday, May 3, 2011

When the Rich are Worried!

It’s easy to understand the need to encourage economic growth and other socially beneficial outcomes with tax breaks. The problem arises when tax policies have unintended outcomes or provide an unfair advantage to one group over another. And oft-times a tax policy starts out working fine but over time it no longer makes sense.

Take our duties on imported sugar. We have driven the price of sugar in the United States to astronomical levels. In addition to impacting the cost of sweetening one’s “morning-joe,” this has greatly sweetened the lives of a handful of sugar plantation owners. Worse, these tariffs have driven nearly every major candy maker out of the country.  Just take a drive up the Queen Elizabeth Way between Fort Erie & Toronto; you can see where much of the candy we enjoy is now made. Oh, and by the way, the Canadians are thrilled with the tens of thousands of jobs we pushed their way.  

On a different note, some of the laws enacted over the last +/-100 years (yes, they go back to 1913) intended to encourage oil exploration are no longer in our interest. We are giving the oil companies billions of taxpayer dollars to do what most companies do with their own funds.

High oil and gasoline prices have suddenly focused attention on these perks; especially when the mega oil companies are reporting spectacular profits. Understand, there is nothing illegal about any of this, but there is a clear ethical line that seems to have been left in the rear view mirror. No one questions any business’s right -even their responsibility- to seek out the help of their elected representatives when they need help.

On the other hand, once the need has passed, don’t they have a responsibility to advise their government contacts that they no longer are in need? Instead the oil companies are fighting to keep billions in tax breaks. That’s not need, that’s greed. They are all quick to say that they are not causing the run up in oil prices. In fact everyone connected with oil has disavowed responsibility. Furthermore, there is no shortage of oil; nor has there been any interruption in the supply chain.

Then why is this plentiful resource so expensive? The experts seem to agree that the culprit is speculation. It appears that the super wealthy seized on the unrest in the Middle East and rushed into the commodity markets creating a price tsunami in oil. While the speculators are lining their pockets, they are emptying ours at the gas pumps. Worse, increased fuel costs are hitting us everywhere from the grocery store to the home store and threatening to derail the recovery.

Some of the well intended deregulation efforts and tax policies of the last two decades are whipping through our economy with devastating impact on the little folks. When you have large numbers of the very wealthy calling for an end to tax breaks for the rich – shouldn’t we listen? It isn’t that they don’t want the money; the rich see this imbalance endangering our economy. It’s too bad this viewpoint escapes those in charge of setting tax policy.