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Hello and welcome 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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And I'm Craig Carroll in New York City.

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Each week Steve and I take a look at the strategies companies are using to shape headlines

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and sometimes save their skins.

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It's a post game show for PR Pros.

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This week a holiday recap for bringing you the best of our podcasts first quarter,

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the fourth calendar quarter of 2024.

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It's been a real pleasure delivering Communication Breakdown to your podcast inbox every week.

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We hope you're enjoying time with family and friends over the holidays.

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To kick off this best of the podcast episode, we're going back to our very first show,

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which we recorded at the end of September.

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That month, Moulson Cours and Caterpillar joined Ford Motor Company in backtracking

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on some diversity commitments, including a very specific move away from supporting the

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human rights campaigns, widely respected corporate equality index.

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All of it prompted by the online activist and provocateur Robbie Starbuck.

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One of the things I think about here is what is different about this particular moment,

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right?

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And here in particular, it's not that Robbie Starbuck is an investor in anyone of the companies

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out there, right?

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This is an example of where we truly have an influencer operating outside of the traditional

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way that we think about, you know, stakeholders, right?

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He's not an employee.

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He's not in the community where any of these companies have their headquarters.

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He's not an investor.

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I don't know.

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Maybe he buys a tractor.

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Maybe he maybe he's got a Harley Davidson motorcycle, but he doesn't fit one of the traditional

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groups.

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So it certainly shows the influence there that people outside of the traditional stakeholder

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groups, such as state influencers have.

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Online, what is his stake in this, right?

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What is the stake that he has in these companies or in this issue?

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No, I agree with you.

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It doesn't seem that he has won at all, except that he seems to wield, you know, some sort

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of threat.

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I don't know if the people are concerned about boycott or just, you know, being criticized.

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I guess, like I said, I guess it's this threat of embarrassment for policies that they were

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previously proud of and policies that don't generally don't seem to be changing because the

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main focus seems to be just don't report it.

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And I have to say that it kind of has backfire written all over it.

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Most of these companies are saying we value diversity.

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We just don't want to be recognized for it.

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And specifically, they're saying they don't want people to know that they treat their LGBT

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employees as equals.

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And you just can't have it both ways on that.

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It's a really strange, tortured way of trying to appease this, I suppose, conservative audience.

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The other thing, again, setting aside the topic, but the subject matter, maybe although

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I think they're sort of inseparable.

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But there is this phenomenon called the Strisen effect.

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You tell people not to look at something and they really want to see it even more.

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And the companies here are performing for this activist troll, so he won't expose them.

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And the upshot is there's going to be more attention for the HRC and their index.

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They've been vocal about these companies and why they believe they're withholding data.

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And that does, you know, to for the Robbie Starbucks of the world that does help fuel the

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culture war.

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So I guess you can claim some kind of victory for that round.

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But over time, I think it's going to draw a lot more awareness and support for the corporate

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equality index.

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And by the way, just because you don't sell for port doesn't mean you won't get ranked.

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Maybe your score goes down.

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Like is that what they want?

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It seems a weird thing to have to explain to somebody who follows, you know, or values the index.

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Yeah.

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So the question is, I mean, what is driving their actions here and what matters more?

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Is it is that the ranking that matters more?

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Is it placating to this very loud voice at this particular moment?

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Or is it truly that their employees or their customers or some particular very important

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stakeholder group is saying, hey, first things first or we want you to focus on this and

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not focus on that?

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Well Craig, I'll say it because I know you're thinking it, but I called that one completely

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wrong.

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It did not backfire on those companies.

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In fact, Robbie Starbucks racked up a couple more companies who signed on to his campaign,

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most notably Walmart.

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It did not draw more support for the HRC that I could tell, although the HRC does say that

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they will have record participation in the corporate equality index for 2025.

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But generally, we did not see an outcry from employees.

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We did not hear a lot of activist groups.

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And I think as the outcome of the election showed, the popular opinion is not strongly against

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these rollbacks on diversity.

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All right.

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Okay.

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So I guess the reality is yes, that is the case.

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I'm not ready to completely give up yet.

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But given the nature of the election, I think that's what's going on.

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Well, let me be clear.

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I still think it's a bad idea.

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And I think that sitting there in September, recording that episode, I thought that, like

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I said, this has backfire written all over it.

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And so far, that has not been the reaction.

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Yeah.

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You know, I'm still very curious about the lack of backlash from employees.

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And I'm curious about a couple of things.

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One, to what degree does the economy influence?

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Other employees are more willing or not willing to speak up.

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That's one issue that I'm certainly thinking about.

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But even now, I'm also thinking about the degree that companies are thinking about placing

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action over words, right?

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To what degree we could think about the optics of the way this looks, the way it sounds,

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the way companies are changing their messaging regarding DEI.

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And some talking about being fair, not playing favorites.

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I think is one tagline that I've heard here.

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But there's some other things that are going on.

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I think one right now, one of the things I'm seeing is that companies are still taking

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some actions, but it's not the actions that we were seeing in the past, right?

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One of the things I'm seeing is how companies are working through their supply chains, working

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through their employees to think about, okay, where does inclusion matter to them?

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Right?

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Where does belonging matter to them?

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And I think that might be one reason why there is as little backlash, right?

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If employees still feel supported, they might not have the optics of the surveys, right?

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The surveys that say that their companies are inclusive.

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But employees might also view these reputation rankings as more optics, right?

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More opportunities for Spinoen.

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They know at the end of the day, it's about the day-to-day realities that they face as

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employees.

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And we also, as we discussed on a later episode, we've seen that employees and people in general

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are supportive of diversity, but the responses to those surveys changes depending on how you

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describe them.

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And that DEI has become this label that is sort of now the definition is too broad.

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It can be applied to anything seemingly objectionable or woke.

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And people then have more negative reaction when you start using that label.

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The other phenomenon I think here that I certainly wasn't anticipating when we recorded

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this is, and others have pointed this out as well, versus eight years ago when Trump came

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to power first, we saw grand public expressions from companies on values.

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And now we are more often seeing quiet internal discussions on values.

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That may be an element that the opponents of diversity are taking advantage of.

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In this case, it may also be why we're not seeing the discussions play out in public the

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way we have in the past, which I think is too bad, honestly.

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But this is how a lot of leaders have decided to try to steer the conversation.

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Yeah, yeah.

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I mean, one of the other things I'm hearing is, you know, it's just being clear who your

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stakeholders are.

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Certainly have to be concerned about public opinion, but at the end of the day, you're having

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to make decisions about where you're spending your time, energy, and resources here.

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And even from an employee perspective, it's the optics of if you're placing more emphasis

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on your reputation rankings for being a great place to work, but your employees don't

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feel like it's a great place to work.

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Or if they feel like you're saying, hey, look, we can't talk to you right now.

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You know, I know you've got this issue that we've got to solve, but we've got to fill out next

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year's survey rankings for best company to work for and we've got to have that in by five

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o'clock.

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Maybe.

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I know that stretching it for sure, but I zoom out and I say some things have not changed.

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A lot of things have not changed.

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As we mentioned, people do value diversity.

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Diversity has been shown to be a business asset when companies are diverse.

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Having a more your workforce is becoming more diverse, whether you want to acknowledge it

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or not and having a more diverse workforce helps you serve a diversifying audience, public

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concern.

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I think that's the thing, right?

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I mean, take it about your talent attraction for the future is certainly playing the long

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game.

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And, you know, look, we've had quarters have been great, some that have haven't, but you

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know, a lot of times companies are just thinking about getting through this current 90 days

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and aren't thinking about it strongly enough from a talent development or talent attraction

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perspective.

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I agree with you and I am guessing that we will be revisiting this issue in the new year.

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In October, we had two episodes about McDonald's and McDonald's had a heck of a year communications

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wise.

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The host of the most talked about and arguably the most effective political photo op of

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the year with Donald Trump handing out French fries and Pennsylvania, but perhaps most significantly

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McDonald's navigated the popular backlash against inflation with a $5 mill deal.

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They also filed lawsuits against major suppliers of price fixing and they took some unprecedented

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steps towards transparency around their post pandemic pricing.

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McDonald's broke with tradition and they released pricing data for several popular products

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along with a letter to their customers and it was a fact check on some of the really persistent

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allegations that were being circulated in social media and even in the press.

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The one that went viral wasn't $18 big Mac combo meal at a rest stop in Connecticut.

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And another rumor that really was sticky was that McDonald's had doubled its price during

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the pandemic, which wasn't true.

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But those perceptions were hard to shake and they ultimately prompted them to release this

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data that they'd previously been reluctant to share.

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And that I thought represents one of the most exciting and frightening and sometimes most

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rewarding parts of crisis communications, which is breaking your own rules.

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You can understand why McDonald's wouldn't want to talk about the average prices nationwide.

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Most of their locations franchises, the corporation doesn't set the prices.

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But in this case, releasing that pricing data was exactly the right tactic to start the

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company on this different path.

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They started fighting the rumors with facts, even though for them, it might have been uncomfortable

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to have those facts out there.

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And when you look at it from the audience's point of view, the facts that came out were

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a lot less upsetting than the misinformation that they were being fed on Twitter.

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Yeah.

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So there's another side of this about breaking your own rules here, not only about being

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transparent about your prices, but it's also drawing attention to your supply chain and deflecting

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criticism or passing criticism onto them.

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That's not something that has historically been a part of the public eye, right?

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So I think that's another case where they are breaking their own rules by drawing attention

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to their supply chain rather than not making a subject of discussion.

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Yeah.

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And here, I mean, through the summer, when they've had to answer questions about pricing,

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when they were trying to knock down these rumors, they did cite these different components

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of their costs that were subject to inflation.

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And so I think the transparency was really the key for the stakeholders that were paying

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attention.

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And I think that trickled down to hopefully to customer perception.

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And there were some other important steps that they took, but transparency for the right

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audience as the audience is paying attention, I think, was effective.

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Yeah.

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So the question here is for me, OK, so now they've already broken their own rule.

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Now they've drawn their supply chain into the public discussion.

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And we don't know where the lawsuits are going to go, but we do know that obviously they've

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tried to do something in the past.

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It's not worked very well.

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And for that reason, they're now having to go this route.

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Nevertheless, it's now a part of the public discussion here.

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So how do you think about rebuilding trust with your customers, your stakeholders after

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you have aired disputes with your supply chain publicly?

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Yeah, I mean, I don't think that the dispute with the supply chain is going to get a lot

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of attention beyond the business pages.

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And therefore, and for a lot of reasons, I think this, the solution here is not entirely

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in the PR tactics.

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The thing that seems to have helped the most with consumers is this $5 Big Mac meal deal.

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They introduced in May or June as well.

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Once that kicked in over the summer, the industry data shows traffic to their stores increased

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and some customers who had stopped visiting McDonald's were coming back.

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Yeah, just reflecting back on that is a very interesting moment of McDonald's breaking their

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own rules, right?

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It's not very common for companies to reveal the prices within their supply chain.

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That's something that's highly unusual.

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The thing that is still relevant here is that these lawsuits appear to be moving forward.

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There's no sign that they have dissipated.

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And yet we're not hearing anything about it.

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Spent your three months and it's been largely quiet since that, since that first one.

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I think you called that out.

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There's strategy worked.

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I mean, you have to hand it to McDonald's that they did a great job with that one.

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It was the transparency play of the year, I would say.

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And transparency works.

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But I think at a higher level, they thought outside the box.

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We said many times that they broke their own rules.

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But this was one where I think they recognized that they needed to do something different

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because the old playbook wasn't working.

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We just recorded at the end of '24.

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We recorded an episode about the drone crisis that the federal government did not do.

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They could have used a little bit more thinking outside the box and breaking of their own rules

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rather than just walking in lockstep along what we normally say.

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And here is the process that we take.

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I think that was the big successful move by McDonald's was stepping outside of their comfort

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zone to the extent that they felt uncomfortable.

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I don't know.

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But they really did a good job in addressing things heads head on.

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Along with the $5 meal deal, they were able to knock down these crazy rumors that were really

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hurting their reputation.

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Yeah, I think that's going to be the takeaway for everybody else here is that you don't need

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to participate in the discussion by arguing with them misinformation.

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You simply need to provide the facts, right?

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You've got information that nobody else has.

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It might not be something that you are something that you've historically shared.

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But in this case here, not arguing with them, but just simply saying, okay, here's the data.

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It was literally a secret weapon.

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They had information that was previously secret and they used it as a weapon.

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So hats off to McDonald's this year.

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One last highlight for this week's show and this was the episode we got the most feedback

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about the press announcement.

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One writer called a drunken dream.

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The most bizarre automotive media launch I've ever attended.

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The stark and puzzling rebranding effort by Jaguar in November drew hot takes from both

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sides of the Atlantic and our podcast was no exception.

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All of the values that they're putting forward are all the claims.

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I don't know if they're values, but you could say that in the commercial that they've released.

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They're just not the values that we know in Jaguar for, right?

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It doesn't fit the heritage of the brand.

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That's part of the question here is that, are they trying to reset the clock in some respect?

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This is a brand new day, brand new product, but whatever it is that they're doing, it's

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going to cause consequences and ramifications.

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Yeah.

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I want to focus on the PR here because I think that was played an outsized role for better

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or worse on how this became a major story.

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We learned about the embargoed press event from the car dealer magazine that I mentioned

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in the introduction.

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There's some important clues in their coverage.

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Most important, it sounds like reporters got to see the car.

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They just can't write about it under the terms of the embargo for a couple more weeks according

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to car dealer.

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Jaguar seems to be trying some kind of multi-stage embargo that frees up the reporters to write

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about the branding and the logo first, and we assume sometime around December 2nd, the

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car stories will start to roll out.

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I think a big part of the problem here is they have a dedicated news cycle, or they wanted

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a dedicated news cycle, focused on the branding, the logo, but there's a really old PR rule

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of thumb that you don't market the marketing.

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You don't put too much effort into promoting the ads or the creative, and we're seeing

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here exactly why that is.

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You're emphasizing style over substance.

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The creative is supposed to be in service of something else, and in this case, I don't

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think it's clear to people.

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Clearly, it's not clear to people what that something is.

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The second, you're drawing attention to the fact that you even need a marketing effort,

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usually to sell a product, but here to reboot the brand, rescue the company.

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Jaguar is now in a window where the reporters have nothing to write about except their marketing

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and it seems like that was part of the plan, and it's not going well.

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They have to endure it until December 2nd or whenever.

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Yeah.

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Look, I didn't spend any time with Steve Jobs, but I am following a lot of the videos of

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him on TikTok these days.

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Somebody said he had some great quotes from in his early 40s, and one of my favorites, and

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it's partly because I'm writing about it now, is the importance of the product in relation

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to your advertising and marketing.

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The thing that always struck me about this clip that I watched was that when you think

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about claims of innovation and quality and durability, those are things that you don't

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see in Japanese advertising.

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It's one of the points that he made, and that they always let the product speak for itself.

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And so as I think about it here, that's so hard to do, right?

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If you're not seeing the product, the product cannot speak for itself.

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So that just further amplifies this a little bit, that the journalists were able

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to see the car, they're not able to write it.

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The audience is seeing these campaigns, but they're not able to see the car.

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I still can't tell if that was the front of the back or if that was even part of the car

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or not in the commercial.

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That's just still weighing on me.

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It was the front of the car.

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One of the central questions of this episode was, is there such thing as bad publicity?

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Or is there no such thing as bad publicity?

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Because the counterargument to what we were talking about, when there were a fair amount

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of supporters online for what Jaguar was trying to do, and those folks said, "Hey, listen,

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it was successful because you got everybody's attention."

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And I think what we were saying there, and I still believe is they were getting attention,

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maybe for the wrong reasons, but given where they are in their rebranding journey, I think

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that they might be able to at least tell themselves that this step was successful because

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they got everybody's attention.

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For the idea that there's no such thing as bad publicity, I still disagree.

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But they did unveil a prototype at Art Week in Miami, and it didn't get as much attention,

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however, as this rebranding.

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Yeah, the rebranding still seems to be dominating.

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It's not like I'm going to be going out and buying or not buying a Jaguar next week or

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next year, after all, the controversy settles down.

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What's interesting here is this is in stark contrast to what we saw with an Iser Bush, because

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Jaguar is doubling down.

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They are standing by the campaign.

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You're talking about the Bud Light campaign of a couple years ago.

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Yes, exactly.

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Which wasn't really a campaign, but the criticism, which is fair of Bud Light at the time,

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was that they ran away from it, and that just created more opening for people to criticize.

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Yeah. In this case, Jaguar is standing by it, and they are making the case that this transformation,

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I'm still trying to figure out which transformation is it in their advertising, or is it in their

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car, but they're claiming that it's essential for Jaguar's future, and they're aiming to

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position the brand as a leader in the luxury electronic vehicle market.

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Yeah, I think that they were effective in letting people know that they were going to

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change their image.

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I don't think they gave people enough information about what the image was going to become,

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or what they wanted it to become.

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That's probably where this fell short, in my opinion, there would have been good, have

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some value, even emphasizing electric, or emphasizing luxury, which I maybe they would

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say that they did given the images that they put out, or having the prototype at art

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week.

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But I think it still fell short, I stand by our episode, and I certainly will be reading

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with interest the response of the automotive press.

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Yeah, I'm kind of curious to see how we're going to look back on this a year or two after

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the new Jaguar's released.

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I'm curious whether it even matters, right?

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We've got a whole year.

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It's an advertising campaign for the next month or two.

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It's generating a lot of controversy.

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Look, nothing else is happening, but their communications for a whole year.

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They're not making more selling cars for the next year.

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That's it, right?

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So what else are they going to do?

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They're essentially playing the communication game, the digital game.

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I think they have an opportunity for keeping the brand alive through their communications

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or digitally, right?

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If they're investing in their website or mobile phone apps or different ways of, but at the

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end of the day, it's not their product, right?

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It's like, I still want the Jag.

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It'll be interesting to see at what point during this coming year, 2025, they make the turn

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and start really focusing on the product to be clear.

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What they showed in Miami, I don't believe is the car that they're going to be selling.

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It was a concept car prototype.

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Right.

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So at some point, they're going to have to make a turn and they'll be interesting to see

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what their judgment is as far as lead time.

375
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Then that car will be released.

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00:24:00,160 --> 00:24:04,760
Maybe we're just assuming that it's going to be a one year, but they may be 15 months,

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00:24:04,760 --> 00:24:05,760
maybe 18 months.

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00:24:05,760 --> 00:24:07,960
How would I know how they're paying their bills in the meantime?

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I think that Land Rover is paying their bills.

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But I don't know for sure.

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00:24:13,760 --> 00:24:14,760
Yeah, yeah, right.

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00:24:14,760 --> 00:24:15,760
Yeah.

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All right.

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Well, it's been fun taking this short walk down a memory lane.

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That is our look back show for this week.

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We hope you've enjoyed it and we hope you will tune in throughout 2025 as we have new

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episodes.

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As always, we want to thank Shawn P Neal and the PeopleForward Network for making our podcast

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possible.

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And if you ever want to let us know what you think about this or any other episode, please

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feel free to email us at 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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Thanks for listening and have a happy new year and we'll see you in January.

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