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Welcome back to Communication Breakdown, a new podcast from the Observatory on Corporate

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Reputation.

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Thanks for joining us.

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I'm Steve Dowling in Silicon Valley.

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I'm Craig Carroll in New York City, each week Steve and I take a look at strategies

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companies are using to shape headlines and sometimes save their skins.

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It's a post game show for PR Pros this week.

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First month scorecards for companies navigating the new normal under Trump.

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And later in this episode, Craig has some new ideas on how we should be thinking about

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stakeholders.

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Interesting perspective for comms leaders and anyone interested in reputation got me thinking

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that's for sure.

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But first for nearly a century, presidential performance has been measured by the first

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hundred days in office.

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There was even a time not so very long ago when a hundred days was thought to be unreasonably

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short to measure any lasting impact of a new administration.

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But I could have second half of January, but like at least a hundred days already.

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I mean, not to mention the three weeks since then.

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So we thought a one month mark would actually be a good time to take stock of how companies

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are holding up under this blood, the zone, frenzy of the second Trump administration.

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We spent a lot of time last week talking about the auto industry, which we'll get back

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to in a few moments as tariffs are undoubtedly one of the most consequential policies poised

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to impact US companies.

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But before we get there, Craig, maybe we should talk about tech.

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The magnificent seven were well represented and highly visible at Trump's inauguration and

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why not?

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They have funded a good chunk of it.

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There was that flurry of first week AI announcements, but since then, pretty quiet.

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Did the tech titans cozy up strategy pay off?

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I'm thinking especially of Google, Meta, and Amazon executive chairman Jeff Bezos.

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They were all among Trump's favorite targets during the campaign.

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Yeah.

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So this is classic modulation at work.

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And being the variation in the strength, the tone, or the pitch of one's own voice, if you

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think about like from a singing or speaking perspective here.

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So these companies came out strong.

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They got their photo ops.

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They made their pledges and then they disappeared.

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And that's smart.

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You know, they know when it comes to Trump, that proximity is risky.

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You know, if you're too close and they become an easy target or if they're too distant

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and they risk losing influence.

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So what are they doing?

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Well, they're keeping themselves in the background, kind of modulating their engagement to maintain

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stability without making headlines.

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And I would say, I don't know for now it's working.

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But the moment Trump needs a villain though, I'd say they better have a game plan.

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Yeah, I agree.

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They were not subtle about pledging their support for Trump once he won.

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And now that they're out of sight, they don't have to explain that support as these immigration

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policies play out or anything that is getting people exercised.

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I feel like though we should keep caveatting these assessments by saying like at least for

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now, to your point, because I think that everybody understands loyalty with Trump is a one-way

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street.

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And if it becomes convenient for him to turn on one of the tech players or the sector,

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then nobody should be surprised when he does.

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So I feel like these companies, they shouldn't be letting their guard down.

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I'm sure they're not.

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We don't really know what relationship maintenance looks like with this White House.

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And that's where these and other companies are going to need to balance their risks.

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And I like the way they use balance here because balance is certainly key.

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And you know, I'm going to have a triangle for this, right?

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So I'm going to put the three piece.

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I'm going to call it the chaos tension triangle power perception and principles.

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These are the things that got a balance.

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I think earlier I mentioned the word modulation.

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This is what I mean by modulation, right?

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The three sides there, they're having to think about, you know, on one hand, power being

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government influence regulatory risk and corporate influence, the perception being public opinion,

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media narratives or stakeholder expectations.

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And then principles being your organizational values or the ethical boundaries, your long-term

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commitments.

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But I'm also going to say your floor, like what you're never going to step below, right?

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I would say values just like at the high end, but the low end is your principles.

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So your values being at the top, like what you're reaching for and principles being

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before.

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Yeah, and I would just add to that as companies are thinking about contingency plans, like

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what would you do if somehow or at some point something, you know, went sideways on you?

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You keeping a close eye on that balance of risks is really critical being prepared for sudden

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shifts.

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And if you have to respond to a sudden change or distance yourself from a policy, and this

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is not just for people who are at the white hot center of this, you know, discussion because

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we don't really know the full impact of a lot of these policies.

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But for companies, even if you don't know what your specific message is going to be, you

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can be planning things like your go-to channel.

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Is it a publication, a specific reporter or your own way to reach customers?

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How are you going to deliver that?

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That's the sort of thing that I would want to be thinking about in terms of like a contingency

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plan, preparation for something going wrong.

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You know, tied to that.

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I mean, this is certainly not the time to be hiding.

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Hope is not a strategy here, right?

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Hoping that this is all going to go away.

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That's not going to work.

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But this idea of balance, I think part of it, what I like about a triangle versus like

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balancing two sides here is you got to be on your feet, right?

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Any side pulls too hard or if you feel like you need to adjust, you got to be on your feet,

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you got to be able to be grounded enough that you can adjust and modulate for whatever

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direction that you need to go.

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And it takes management even though you are not in control of the policies and you may feel

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like you're on the receiving end of it, there are things that you can do to prepare for your

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role if it does start to impact you and your company's reputation.

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But at least for now, the tech company seem to be managing these things pretty well.

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They're staying a pretty low profile for the moment at the extent that they can.

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And I would just add to that, we've mentioned this before in this podcast, we still don't

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really have a good read on how that position is playing with their employees.

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Our proximity to the White House and those policies.

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But it feels like at least right now that's a case of no news is good news.

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And I think that's kind of a theme here when we think about companies and this White House.

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So before we move on from the tech companies, you have a scorecard you want to give them

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a grade or rating on how they've done the first 30 days?

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You know, actually I do.

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I developed a little scorecard here and I would say on the scale of one to ten, I would give

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the tech giants here in general, a seven out of ten.

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So some of the strengths were the major tech companies have largely stayed out of the limelight

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by keeping a low profile since the inauguration.

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They're avoiding direct association with the Trump's administration.

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And right now it just seems like they're able to focus on other things and operate without

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any type of immediate backlash.

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I don't know, it might be this recent focus on quantum that's just popped up.

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I think that's fair seven out of ten on the carol scale for the tech companies and I'm

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going to score that as no news is good news.

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And we'll see how sustainable that is.

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But it is becoming a theme, I think.

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And let's stick with that as we shift gears and talk about the economy.

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Last week we talked about General Motors and Ford and their different approaches to the

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tariff issue.

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Yeah.

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And no signs of an off ramp there.

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Ford's CEO, as we recapped, went public, warned of job losses and said tariff threats

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have only produced more costs and chaos to his words.

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General Motors has chosen not to sound the economic alarms and that strategy continued

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this week as their CFO, Paul Jacobson, I think he was talking at a conference.

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He would only go so far as to say tariffs would mean a lot of impact and change.

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But what are the trends that is standing out to me, Craig, the audio industry, I think

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is just one example of this is how companies are being so cautious about talking about

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these risks.

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And Bloomberg has a really interesting report this week, the companies, including CVS,

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Chipotle, American Airlines, they're adding economic risk factors to their 10Ks, burying

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it in that language that very few people actually read just because it's too voluminous.

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Although this would be a great application for some of our favorite AI tools.

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These companies are worried about jobs, they're worried about tariffs, but for now, they're

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mostly putting that in the fine print.

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From my point of view, as I've always said, playing peekaboo with this stuff is risky.

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And as a really basic principle, you need to be consistent in what you're saying.

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Bloomberg's example, the CEO of CVS tells analysts earlier this month, he's encouraged

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by constructive dialogue with new administration, Medicare and possible changes there.

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But the same day, their 10K comes out with language about uncertainty and risk in the very

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same area.

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Yeah, look, I mean, that's tough, right?

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You can't say constructive dialogue in one breath and then uncertainty and risk in your

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filings and the other.

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That's not modulation, that's just completely mixed messaging there.

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When we're already facing so much chaos anyway, right, inconsistency is an even bigger

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risk than saying nothing at all.

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The companies that survive these political and economic shifts right now are the ones

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that are keeping their messages calibrated across all of their stakeholder, stakeholder groups,

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not just analysts and investors, but employees, customers and regulators too.

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Okay, well, we've been talking about the auto industry and maybe this should have been part

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of the tech conversation instead.

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But I think the company whose reputation arguably has been the most impacted by Trump's

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second term is Tesla.

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Sales in Europe are in freefall.

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The stock has recovered a little bit, but at one point it was down, around 20% in the

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weeks following the inauguration.

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On the one hand, Elon Musk is effectively co-president now, so there's that.

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But on the other, a lot of people are really angry at him for seemingly indiscriminately

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gutting the federal government.

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And Tesla has become, I would say, one of the most high profile and maybe convenient outlets

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for that frustration.

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We have people holding rallies at Tesla factories and showrooms.

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They're marching to SpaceX offices in Washington, DC.

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We see cyber trucks parked in Brooklyn and Manhattan getting hit with eggs and worse.

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Looks like maybe some angry dog owners targeting the cyber trucks.

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So Tesla is like a proxy for a lot of people's anger.

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Yeah.

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Look, they're the ultimate case study right now, but what happens when you refuse to modulate?

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So Musk isn't balancing power perception of principles.

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He's going all in on power.

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He's costing him.

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Sales are taking the stock market just took a massive hit and his customer base is shrinking

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as Tesla is becoming a political symbol instead of just a EV company.

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There's reports also, depending on how you calculated, he's no longer the richest man in

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the world.

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Tough pill to swallow.

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And then there's that too.

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So this is what happens when you don't leave yourself room to adjust.

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The tech company is here of a way out, but it doesn't look like Tesla does.

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I gave him a five, actually five out of ten.

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Yeah, five out of ten, right?

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Yeah, I tell you know, some of the strengths here is that he's positioned himself as a power

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broker with Trump.

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He's got influence over regulatory decisions.

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And by eliminating a traditional PR teams, he's made himself the sole voice of Tesla, SpaceX

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and Twitter.

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Now, the risks, and this is why I gave him such a poor score, is that the Musk Trump alignment.

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That's a ticking time bomb.

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If or when the bromance ends, Elon's going to be the one left holding the bag.

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So if you think about Tesla's 50% sales decline in Europe and the fiscal backlash, you know,

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the tax on cyber trucks, SpaceX offices, these are early warning signs.

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So I would say the tip here is that the story sticks longer than the stunt.

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And Musk, right now he's driving a disruption, but public memory will hold on to his role

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a little bit more as a destroyer than as a builder.

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So I think he needs to reintroduce some kind of vision beyond government efficiency and

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performative power.

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I think that's right.

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Elon famously does not believe in media relations.

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He fired the PR team at Twitter when he took over.

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Tesla does not have ahead of communications.

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SpaceX apparently has some PR apparatus.

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The question is, does he even care or does he have to care about his reputation?

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I think in one sense, not at all.

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The calculation goes.

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He's the richest man or one of the richest men in the world.

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He's acting as the government now, which is he's effectively controlling both his regulators

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and his biggest customers.

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And he owns the platform where so much of the discussions about him are taking place.

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But in another sense, to your point, the conventional wisdom is that the bromance will eventually

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end in tears.

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And I don't see it ending especially well for Elon reputation-wise.

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He's leaning into this role as a disruptor.

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And right now a destroyer and I think you're right.

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That's going to stick in people's minds longer than whatever memories they have of him building

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rockets or electric cars.

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But this is not going to be completely good news.

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But another side of this is because we have been here before.

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We know a little bit about how some of these stories are going to end.

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It's not going to help us in the short run, but eventually this bromance is going to run

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its course.

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And obviously that's not today, but we know at some point it's going to happen.

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Yeah, some people are surprised that it has lasted this long.

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And maybe I would probably count myself among them.

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But here we are, this 30 days does feel like 100, if not more.

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Okay, well Craig, no conversation about corporate communications is complete these days without

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talking about diversity.

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A program's formerly known as DEI have been the target of a frontal assault by the White

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House, most notably through the executive orders, calling them illegal and immoral.

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We talked about this a lot in January when Target became one of the most high profile companies

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to roll back their diversity initiatives.

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That was the first week of the new administration.

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And I think it was clearly a reaction in some way to Trump's glory of activity in the earliest

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hours of his administration.

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And since then, Google, Disney and Goldman Sachs have made at least partial changes to their

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programs, but they're not getting the same type of headlines.

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What are we learning about companies, options and what's working and what's not as this diversity

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fight tracks on?

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Yeah, well, what we're seeing for rather hearing is that companies are choosing silence over

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strategy, meaning we're hearing their silets is what I would say.

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They're hoping to ride this out without making any waves and that's just not a long term solution.

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The playback that we've seen so far, Target making its DEI shift immediately while others

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such as Disney and Goldman Sachs are quietly tweaking policies.

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This is an attempt at modulation.

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The problem is there's no such thing as a quiet move in the space anymore.

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The real question is whether DEI survives, whether companies are ready to own the recalibrations

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publicly or whether they're going to let the fight to be redefined for them.

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That's not to say when they're being silent here that they're not doing anything, right?

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Some certainly are, right?

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They have their heads buried in the sand and they're believing that hope is going to be

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a strategy to save them here.

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But on the other hand, there's so many companies that are actively ready.

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Obviously, they're keeping their heads down, but they are ready.

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Should they become attention?

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They're just not drawing attention to themselves right now during this moment.

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Yeah, I think this is continuing the theme that we've been talking about when we were talking

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about broader economic concerns.

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The rollbacks on diversity that we're seeing now are quieter and seemingly more subtle.

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They was the street.com this week noticed that GM removed DEI language from their 10K.

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Last year they said they strived to promote diversity, equity and inclusion.

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This year they say they want an inclusive work environment and all employees can perform

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with their best.

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We've seen other changes like that on websites and other, the subtle language changes.

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But again, I think companies are trying to balance doing just enough performatively, changing

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their language just enough to either stay out of trouble with the Trump administration

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or the activists that are working in parallel to go at these companies.

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But they're also doing this quietly so they don't track too much criticism from the public.

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So you have those changes where companies I think are trying to avoid disappointing, broader

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public customers.

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And then the positioning on the economy is happening quietly so they're not attracting criticism

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from the White House.

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Yeah.

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So I gave three scores here because there's some it's activity going on.

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So I'm just going to come up with the categories rather than, okay, I'm going to call a few

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companies out, but not too many.

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So there's three categories, right?

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So you have corporate America's, why the DEI retreat?

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You've got, I guess the target playbook, which is timing the controversy.

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And then hey, I think we need to give Trump a score himself right now if you think about

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his own chaos management score card out.

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So I'm going to say the three scores I came up with were for corporate America as a whole,

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we're thinking about GM, Disney, Goldman Sachs.

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I gave them a six out of 10 on diversity targets.

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That's tough, but they had the highest score.

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I gave them an eight out of 10.

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So something about using timing as a weapon where companies are looking to, you know, if

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they have to pivot on controversial policies, then they're able to do it when, you know, the

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public is largely focused on something else at the moment to avoid being in the storm,

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but Trump, right?

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And those companies that are deeply involved with Trump for out of 10.

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So I mean, if you look at his approval rating right now, it's just dropped from 47 to 44

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percent one month.

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You know, the implication here's that while Trump's influence is untenable brands, they

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should not assume that public support is universally aligned with the Trump administration's policies.

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So right now, it just seems that the AI is still polling better than both political parties

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and most politicians at this point.

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Well, I'm glad you brought that up.

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Quinnipiac is the poll you're referring to.

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And the question was, do you think that policies focused on increasing diversity, equity,

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and inclusion in the workplace are a good thing for organizations or a bad thing for organizations?

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And 53 percent said good, 38 percent bad, as you point out, that's a plus 15 in favor

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of diversity.

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A slight majority of respondents.

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And I think what's important here is this is in line with most other surveys that we

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have seen over the past year.

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And you know, the thing is, the AI still has a net positive rating, you know, 15 points

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higher than the Trump approval rating and both parties in Congress.

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So, you know, the implication here's that while Trump's influence is untenable, brands

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that they should not assume that public support is universally aligned with the Trump administration's

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policies.

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So right now, it just seems that the AI is still polling better than both political parties

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and most politicians at this point.

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So I feel like I say it on every episode, but it's really important to remember that despite

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this avalanche of executive orders and the pressure from Republican attorneys general

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and these activist groups that have companies like Target worried, diversity is still something

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that a majority of Americans value.

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That has not changed.

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Right.

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But I think this is why we're seeing companies try to walk this tightrope of, you know, saying

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just enough and quiet enough so that they are, I would call it your eight out of ten

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and your six out of ten.

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I would call those survival scores because what they're doing is they're really in survival

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mode and sort of hoping that they can make these really minor adjustments to language

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without really changing enough so that they can still tell another audience that nothing

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has changed.

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Yeah.

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I'm going to go back to your metaphor of the tightrope here because it's really like being

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pulled in three different directions.

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I've heard of some people saying, you know, follow the numbers, not the noise, you know,

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that a political headwinds, you know, might be pushing companies towards rollbacks, but

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long term consumer sentiment is what should be guiding strategy.

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But even further than that is your principles and your values, right?

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And that is the third direction here that companies need to remember is that even though

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there's a sense of looking at where the direction is going and where the political winds are

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going that they still have to view their values and the principles as a direction that they

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keep grounded on.

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And I think just another for those scoring at home, this is the third or fourth episode

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in row where Craig has brought up values before me.

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And the Cal Ripken of values message.

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I was I was trying to negotiate with you right now.

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It's like I've got you look, values are super important, but right now when everyone else is

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going low, you just got to keep your concom and composure and I'm thinking, no, let's keep

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the just the fundamental things that we can all agree on, but you're right.

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I think no, I, I support it.

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I'm going to say three weeks in a row.

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I'm not really safe for three, probably three.

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I support, but I'm, I'm say that in a supportive way.

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And since you brought up polls and I know that you maybe were not as impressed by this

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number as I was, but it comes from our friends at the Harris poll.

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And their poll out this week said 24% of Americans say they have stopped shopping at their favorite

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stores because of their politics and the numbers are stronger among Democrats than among Republicans.

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And covering those results, the Guardian pointed to target as the first example.

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Yeah.

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Also look at sales data.

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I mean, I know what they say they're doing, but I want to see the actual behavior.

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I think you can't ignore it though, because that is a reputational impact there.

365
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Absolutely.

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Right.

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It's certainly, you know, something that you've got to keep your, your finger on the polls

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about for sure.

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Okay.

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Part two of our podcast this week.

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I'm going to call this bonus content for the comms, aficionados.

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But everyone else is invited to stay tuned as well.

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Maybe you learned something.

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A lot of times on the show and out there in the real world of PR strategy, we talk about stakeholders.

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What do we mean by that?

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Most of us probably have a similar idea, but let's lay it out.

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A stakeholder is a group of employees who have an interest in a comms decision because it

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affects them in some way.

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Employees are a key internal stakeholder group.

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The sales department or customer service team are internal stakeholders.

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They have to know about announcements and changes that you might be announcing because

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they probably have to adjust accordingly.

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00:22:55,560 --> 00:22:59,200
stakeholders and the people who use your products are generally external stakeholders.

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They are affected by your policies.

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Maybe you're responding to their feedback.

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Same with investors, shareholders, business partners, people who live in the apartments

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next door to your corporate headquarters.

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They might be external stakeholders too.

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So my friend Craig here who spends a lot of time thinking about the way we comms people

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look at the world.

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Professor Carroll has come up with a different way of looking at what we often call stakeholders.

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But we should really be thinking of them as Craig, you're calling them, "Relationates."

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"Relationates."

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R-E-L-A-T-I-O-N-A-T-E-S.

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"Relationates."

396
00:23:33,440 --> 00:23:34,440
Okay.

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So what is a relationship?

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And how does it differ from a stakeholder?

399
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All right.

400
00:23:39,600 --> 00:23:44,720
So I think what got us here was this idea that we have more than stakeholders and if everybody

401
00:23:44,720 --> 00:23:47,520
is a stakeholder than nobody is a stakeholder.

402
00:23:47,520 --> 00:23:52,160
So it's understanding that we've got other groups that we got to think about as well.

403
00:23:52,160 --> 00:23:57,520
But in short, you know, relation to this anyone that has a connection to an organization, whether

404
00:23:57,520 --> 00:23:59,280
they have a direct stake in it or not.

405
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So the problem with world stakeholders that we've stretched so far that it's lost its meaning,

406
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not everyone who influences a company is a stakeholder in the traditional sense.

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Some are audiences, some are regulators, some are critics, constituents, some are just,

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00:24:14,280 --> 00:24:18,560
you know, the general public passive observers who can shape perception.

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So this idea of relationates lets us to step back and acknowledge that there's a whole

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range of relationships that matter without forcing everyone into a one-size-fits-all box.

411
00:24:29,280 --> 00:24:30,280
Okay.

412
00:24:30,280 --> 00:24:34,400
So does this mean that stakeholders as a term should be reserved for what we currently

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call what internal stakeholders or is there a difference like who's not a stakeholder?

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There's a lot of groups at art, right?

415
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So you've got constituents, audiences, markets, publics, users, and of course you've got stakeholders.

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But then you also have victims.

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I picked that up from Sally Susman's last book.

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Sally Susman, Pfizer Chief Corporate Affairs Officer, I think the book was breaking through.

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She had true three pages devoted to it tied to the pandemic, which really shaped my thinking

420
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on the importance of victims, but they're not stakeholders.

421
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And of course, we've got influencers, intermediaries, and then partners, proxies appear.

422
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So there's point is we stretch the term stakeholders too far, right?

423
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And so, you know, look, stakeholders are certainly the most important, but we can't take our eye

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off the ball of these other groups.

425
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And if we're using the word stakeholders or to capture everyone, then we're actually not

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giving stakeholders themselves enough attention and priority.

427
00:25:35,800 --> 00:25:41,760
So the purpose here is to put stakeholders at the same level as these other groups, not

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to dilute their importance for their priority, but just to be honest with ourselves, to say

429
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that a lot of times we use the term stakeholders as this catch all raised to represent all the

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00:25:53,160 --> 00:25:54,640
groups that we have to interact with.

431
00:25:54,640 --> 00:25:56,640
And that's really what the point is here.

432
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So that's really what I would say is at stake here.

433
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All right.

434
00:26:02,360 --> 00:26:10,440
Why should listeners think about adopting this new framework relation at versus stakeholders?

435
00:26:10,440 --> 00:26:15,160
Is there a difference in how we do our jobs or is this just kind of like a Gulf of America

436
00:26:15,160 --> 00:26:16,960
distinction?

437
00:26:16,960 --> 00:26:18,800
I was hoping you wouldn't go there.

438
00:26:18,800 --> 00:26:21,120
Oh my gosh, but that's a whole other conversation.

439
00:26:21,120 --> 00:26:26,280
We can have a whole episode on who gets to say whether this is Gulf of Mexico or Gulf

440
00:26:26,280 --> 00:26:29,520
America, but that's another podcast episode for sure.

441
00:26:29,520 --> 00:26:33,680
But to your question, it absolutely changes how we do our job.

442
00:26:33,680 --> 00:26:38,960
So right now, corporate communication streets, stakeholders as this catch all phrase, which

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00:26:38,960 --> 00:26:40,840
leads to bad strategy.

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00:26:40,840 --> 00:26:47,120
Companies end up over-engaging some groups, under-engaging others, and missing key relationship dynamics

445
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entirely.

446
00:26:48,360 --> 00:26:54,120
So I think in terms of relation as being this catch all phrase, which we then of course have

447
00:26:54,120 --> 00:26:57,760
to say which groups that we're dealing with, but there are sometimes when we need to

448
00:26:57,760 --> 00:26:59,080
think more broadly.

449
00:26:59,080 --> 00:27:05,000
But what this should do is allow us to be far more precise, be far more clear and stop

450
00:27:05,000 --> 00:27:12,120
treating the media regulators as if they have the same needs as customers or investors or

451
00:27:12,120 --> 00:27:13,120
your employees.

452
00:27:13,120 --> 00:27:17,120
Now, that's not to say that they don't have some type of impact and role, but we just

453
00:27:17,120 --> 00:27:21,640
got to be clear of what it is so that we're not blindsided or spending too much time on

454
00:27:21,640 --> 00:27:24,840
one point that we ignore the needs and interests of the others.

455
00:27:24,840 --> 00:27:30,760
So we start designing engagement strategies that actually fit the audience we're dealing

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00:27:30,760 --> 00:27:36,960
with when we're aware of how audiences who are defined by the media channels and platforms

457
00:27:36,960 --> 00:27:37,960
are different.

458
00:27:37,960 --> 00:27:43,800
And that just leads to better communication, smarter decision making, and fewer wide spots.

459
00:27:43,800 --> 00:27:45,920
All right, relation it is.

460
00:27:45,920 --> 00:27:49,920
We will try to apply that in our day-to-day work.

461
00:27:49,920 --> 00:27:53,360
Gulf of Mexico, Gulf America.

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That is our show for this week.

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We want to thank our listeners and all our other relationships for tuning in.

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And we want to thank especially Shawn P Neal and the PeopleForward Network for making our

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podcast possible.

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If you'd like to tell us what you think, we'd love to hear from you.

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Our email address is podcast@ocrnetwork.com.

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Communication breakdown is a production of the Observatory on Corporate Reputation.

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I'm Steve Dowling.

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And I'm Craig Carroll.

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And Steve, gosh, not related to their audiences.

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When our audiences come back anyway, thanks for listening.

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We'll be back next week.

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[MUSIC]

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#CorporateReputation, #Trump, #TechIndustry, #Tariffs, #Tesla, #diversity, #DEI, #StakeholderEngagement, #CommunicationStrategy #Google #Meta #Amazon #Ford #GeneralMotors #GM #CVS #Chipotle #AmericanAirlines #Tesla #Musk #ElonMusk #SpaceX #Twitter #Target #Disney #GoldmanSachs