Hello and welcome to Communication Breakdown, a new podcast from the Observatory on Corporate
Reputation.
Thanks for joining us.
I'm Steve Dowling in Silicon Valley.
And I'm Craig Carroll in New York City.
Each week Steve and I take a look at the strategies companies are using to shape headlines
and sometimes save their skins.
It's a post game show for PR Pros.
This week a holiday recap for bringing you the best of our podcasts first quarter,
the fourth calendar quarter of 2024.
It's been a real pleasure delivering Communication Breakdown to your podcast inbox every week.
We hope you're enjoying time with family and friends over the holidays.
To kick off this best of the podcast episode, we're going back to our very first show,
which we recorded at the end of September.
That month, Moulson Cours and Caterpillar joined Ford Motor Company in backtracking
on some diversity commitments, including a very specific move away from supporting the
human rights campaigns, widely respected corporate equality index.
All of it prompted by the online activist and provocateur Robbie Starbuck.
One of the things I think about here is what is different about this particular moment,
right?
And here in particular, it's not that Robbie Starbuck is an investor in anyone of the companies
out there, right?
This is an example of where we truly have an influencer operating outside of the traditional
way that we think about, you know, stakeholders, right?
He's not an employee.
He's not in the community where any of these companies have their headquarters.
He's not an investor.
I don't know.
Maybe he buys a tractor.
Maybe he maybe he's got a Harley Davidson motorcycle, but he doesn't fit one of the traditional
groups.
So it certainly shows the influence there that people outside of the traditional stakeholder
groups, such as state influencers have.
Online, what is his stake in this, right?
What is the stake that he has in these companies or in this issue?
No, I agree with you.
It doesn't seem that he has won at all, except that he seems to wield, you know, some sort
of threat.
I don't know if the people are concerned about boycott or just, you know, being criticized.
I guess, like I said, I guess it's this threat of embarrassment for policies that they were
previously proud of and policies that don't generally don't seem to be changing because the
main focus seems to be just don't report it.
And I have to say that it kind of has backfire written all over it.
Most of these companies are saying we value diversity.
We just don't want to be recognized for it.
And specifically, they're saying they don't want people to know that they treat their LGBT
employees as equals.
And you just can't have it both ways on that.
It's a really strange, tortured way of trying to appease this, I suppose, conservative audience.
The other thing, again, setting aside the topic, but the subject matter, maybe although
I think they're sort of inseparable.
But there is this phenomenon called the Strisen effect.
You tell people not to look at something and they really want to see it even more.
And the companies here are performing for this activist troll, so he won't expose them.
And the upshot is there's going to be more attention for the HRC and their index.
They've been vocal about these companies and why they believe they're withholding data.
And that does, you know, to for the Robbie Starbucks of the world that does help fuel the
culture war.
So I guess you can claim some kind of victory for that round.
But over time, I think it's going to draw a lot more awareness and support for the corporate
equality index.
And by the way, just because you don't sell for port doesn't mean you won't get ranked.
Maybe your score goes down.
Like is that what they want?
It seems a weird thing to have to explain to somebody who follows, you know, or values the index.
Yeah.
So the question is, I mean, what is driving their actions here and what matters more?
Is it is that the ranking that matters more?
Is it placating to this very loud voice at this particular moment?
Or is it truly that their employees or their customers or some particular very important
stakeholder group is saying, hey, first things first or we want you to focus on this and
not focus on that?
Well Craig, I'll say it because I know you're thinking it, but I called that one completely
wrong.
It did not backfire on those companies.
In fact, Robbie Starbucks racked up a couple more companies who signed on to his campaign,
most notably Walmart.
It did not draw more support for the HRC that I could tell, although the HRC does say that
they will have record participation in the corporate equality index for 2025.
But generally, we did not see an outcry from employees.
We did not hear a lot of activist groups.
And I think as the outcome of the election showed, the popular opinion is not strongly against
these rollbacks on diversity.
All right.
Okay.
So I guess the reality is yes, that is the case.
I'm not ready to completely give up yet.
But given the nature of the election, I think that's what's going on.
Well, let me be clear.
I still think it's a bad idea.
And I think that sitting there in September, recording that episode, I thought that, like
I said, this has backfire written all over it.
And so far, that has not been the reaction.
Yeah.
You know, I'm still very curious about the lack of backlash from employees.
And I'm curious about a couple of things.
One, to what degree does the economy influence?
Other employees are more willing or not willing to speak up.
That's one issue that I'm certainly thinking about.
But even now, I'm also thinking about the degree that companies are thinking about placing
action over words, right?
To what degree we could think about the optics of the way this looks, the way it sounds,
the way companies are changing their messaging regarding DEI.
And some talking about being fair, not playing favorites.
I think is one tagline that I've heard here.
But there's some other things that are going on.
I think one right now, one of the things I'm seeing is that companies are still taking
some actions, but it's not the actions that we were seeing in the past, right?
One of the things I'm seeing is how companies are working through their supply chains, working
through their employees to think about, okay, where does inclusion matter to them?
Right?
Where does belonging matter to them?
And I think that might be one reason why there is as little backlash, right?
If employees still feel supported, they might not have the optics of the surveys, right?
The surveys that say that their companies are inclusive.
But employees might also view these reputation rankings as more optics, right?
More opportunities for Spinoen.
They know at the end of the day, it's about the day-to-day realities that they face as
employees.
And we also, as we discussed on a later episode, we've seen that employees and people in general
are supportive of diversity, but the responses to those surveys changes depending on how you
describe them.
And that DEI has become this label that is sort of now the definition is too broad.
It can be applied to anything seemingly objectionable or woke.
And people then have more negative reaction when you start using that label.
The other phenomenon I think here that I certainly wasn't anticipating when we recorded
this is, and others have pointed this out as well, versus eight years ago when Trump came
to power first, we saw grand public expressions from companies on values.
And now we are more often seeing quiet internal discussions on values.
That may be an element that the opponents of diversity are taking advantage of.
In this case, it may also be why we're not seeing the discussions play out in public the
way we have in the past, which I think is too bad, honestly.
But this is how a lot of leaders have decided to try to steer the conversation.
Yeah, yeah.
I mean, one of the other things I'm hearing is, you know, it's just being clear who your
stakeholders are.
Certainly have to be concerned about public opinion, but at the end of the day, you're having
to make decisions about where you're spending your time, energy, and resources here.
And even from an employee perspective, it's the optics of if you're placing more emphasis
on your reputation rankings for being a great place to work, but your employees don't
feel like it's a great place to work.
Or if they feel like you're saying, hey, look, we can't talk to you right now.
You know, I know you've got this issue that we've got to solve, but we've got to fill out next
year's survey rankings for best company to work for and we've got to have that in by five
o'clock.
Maybe.
I know that stretching it for sure, but I zoom out and I say some things have not changed.
A lot of things have not changed.
As we mentioned, people do value diversity.
Diversity has been shown to be a business asset when companies are diverse.
Having a more your workforce is becoming more diverse, whether you want to acknowledge it
or not and having a more diverse workforce helps you serve a diversifying audience, public
concern.
I think that's the thing, right?
I mean, take it about your talent attraction for the future is certainly playing the long
game.
And, you know, look, we've had quarters have been great, some that have haven't, but you
know, a lot of times companies are just thinking about getting through this current 90 days
and aren't thinking about it strongly enough from a talent development or talent attraction
perspective.
I agree with you and I am guessing that we will be revisiting this issue in the new year.
In October, we had two episodes about McDonald's and McDonald's had a heck of a year communications
wise.
The host of the most talked about and arguably the most effective political photo op of
the year with Donald Trump handing out French fries and Pennsylvania, but perhaps most significantly
McDonald's navigated the popular backlash against inflation with a $5 mill deal.
They also filed lawsuits against major suppliers of price fixing and they took some unprecedented
steps towards transparency around their post pandemic pricing.
McDonald's broke with tradition and they released pricing data for several popular products
along with a letter to their customers and it was a fact check on some of the really persistent
allegations that were being circulated in social media and even in the press.
The one that went viral wasn't $18 big Mac combo meal at a rest stop in Connecticut.
And another rumor that really was sticky was that McDonald's had doubled its price during
the pandemic, which wasn't true.
But those perceptions were hard to shake and they ultimately prompted them to release this
data that they'd previously been reluctant to share.
And that I thought represents one of the most exciting and frightening and sometimes most
rewarding parts of crisis communications, which is breaking your own rules.
You can understand why McDonald's wouldn't want to talk about the average prices nationwide.
Most of their locations franchises, the corporation doesn't set the prices.
But in this case, releasing that pricing data was exactly the right tactic to start the
company on this different path.
They started fighting the rumors with facts, even though for them, it might have been uncomfortable
to have those facts out there.
And when you look at it from the audience's point of view, the facts that came out were
a lot less upsetting than the misinformation that they were being fed on Twitter.
Yeah.
So there's another side of this about breaking your own rules here, not only about being
transparent about your prices, but it's also drawing attention to your supply chain and deflecting
criticism or passing criticism onto them.
That's not something that has historically been a part of the public eye, right?
So I think that's another case where they are breaking their own rules by drawing attention
to their supply chain rather than not making a subject of discussion.
Yeah.
And here, I mean, through the summer, when they've had to answer questions about pricing,
when they were trying to knock down these rumors, they did cite these different components
of their costs that were subject to inflation.
And so I think the transparency was really the key for the stakeholders that were paying
attention.
And I think that trickled down to hopefully to customer perception.
And there were some other important steps that they took, but transparency for the right
audience as the audience is paying attention, I think, was effective.
Yeah.
So the question here is for me, OK, so now they've already broken their own rule.
Now they've drawn their supply chain into the public discussion.
And we don't know where the lawsuits are going to go, but we do know that obviously they've
tried to do something in the past.
It's not worked very well.
And for that reason, they're now having to go this route.
Nevertheless, it's now a part of the public discussion here.
So how do you think about rebuilding trust with your customers, your stakeholders after
you have aired disputes with your supply chain publicly?
Yeah, I mean, I don't think that the dispute with the supply chain is going to get a lot
of attention beyond the business pages.
And therefore, and for a lot of reasons, I think this, the solution here is not entirely
in the PR tactics.
The thing that seems to have helped the most with consumers is this $5 Big Mac meal deal.
They introduced in May or June as well.
Once that kicked in over the summer, the industry data shows traffic to their stores increased
and some customers who had stopped visiting McDonald's were coming back.
Yeah, just reflecting back on that is a very interesting moment of McDonald's breaking their
own rules, right?
It's not very common for companies to reveal the prices within their supply chain.
That's something that's highly unusual.
The thing that is still relevant here is that these lawsuits appear to be moving forward.
There's no sign that they have dissipated.
And yet we're not hearing anything about it.
Spent your three months and it's been largely quiet since that, since that first one.
I think you called that out.
There's strategy worked.
I mean, you have to hand it to McDonald's that they did a great job with that one.
It was the transparency play of the year, I would say.
And transparency works.
But I think at a higher level, they thought outside the box.
We said many times that they broke their own rules.
But this was one where I think they recognized that they needed to do something different
because the old playbook wasn't working.
We just recorded at the end of '24.
We recorded an episode about the drone crisis that the federal government did not do.
They could have used a little bit more thinking outside the box and breaking of their own rules
rather than just walking in lockstep along what we normally say.
And here is the process that we take.
I think that was the big successful move by McDonald's was stepping outside of their comfort
zone to the extent that they felt uncomfortable.
I don't know.
But they really did a good job in addressing things heads head on.
Along with the $5 meal deal, they were able to knock down these crazy rumors that were really
hurting their reputation.
Yeah, I think that's going to be the takeaway for everybody else here is that you don't need
to participate in the discussion by arguing with them misinformation.
You simply need to provide the facts, right?
You've got information that nobody else has.
It might not be something that you are something that you've historically shared.
But in this case here, not arguing with them, but just simply saying, okay, here's the data.
It was literally a secret weapon.
They had information that was previously secret and they used it as a weapon.
So hats off to McDonald's this year.
One last highlight for this week's show and this was the episode we got the most feedback
about the press announcement.
One writer called a drunken dream.
The most bizarre automotive media launch I've ever attended.
The stark and puzzling rebranding effort by Jaguar in November drew hot takes from both
sides of the Atlantic and our podcast was no exception.
All of the values that they're putting forward are all the claims.
I don't know if they're values, but you could say that in the commercial that they've released.
They're just not the values that we know in Jaguar for, right?
It doesn't fit the heritage of the brand.
That's part of the question here is that, are they trying to reset the clock in some respect?
This is a brand new day, brand new product, but whatever it is that they're doing, it's
going to cause consequences and ramifications.
Yeah.
I want to focus on the PR here because I think that was played an outsized role for better
or worse on how this became a major story.
We learned about the embargoed press event from the car dealer magazine that I mentioned
in the introduction.
There's some important clues in their coverage.
Most important, it sounds like reporters got to see the car.
They just can't write about it under the terms of the embargo for a couple more weeks according
to car dealer.
Jaguar seems to be trying some kind of multi-stage embargo that frees up the reporters to write
about the branding and the logo first, and we assume sometime around December 2nd, the
car stories will start to roll out.
I think a big part of the problem here is they have a dedicated news cycle, or they wanted
a dedicated news cycle, focused on the branding, the logo, but there's a really old PR rule
of thumb that you don't market the marketing.
You don't put too much effort into promoting the ads or the creative, and we're seeing
here exactly why that is.
You're emphasizing style over substance.
The creative is supposed to be in service of something else, and in this case, I don't
think it's clear to people.
Clearly, it's not clear to people what that something is.
The second, you're drawing attention to the fact that you even need a marketing effort,
usually to sell a product, but here to reboot the brand, rescue the company.
Jaguar is now in a window where the reporters have nothing to write about except their marketing
and it seems like that was part of the plan, and it's not going well.
They have to endure it until December 2nd or whenever.
Yeah.
Look, I didn't spend any time with Steve Jobs, but I am following a lot of the videos of
him on TikTok these days.
Somebody said he had some great quotes from in his early 40s, and one of my favorites, and
it's partly because I'm writing about it now, is the importance of the product in relation
to your advertising and marketing.
The thing that always struck me about this clip that I watched was that when you think
about claims of innovation and quality and durability, those are things that you don't
see in Japanese advertising.
It's one of the points that he made, and that they always let the product speak for itself.
And so as I think about it here, that's so hard to do, right?
If you're not seeing the product, the product cannot speak for itself.
So that just further amplifies this a little bit, that the journalists were able
to see the car, they're not able to write it.
The audience is seeing these campaigns, but they're not able to see the car.
I still can't tell if that was the front of the back or if that was even part of the car
or not in the commercial.
That's just still weighing on me.
It was the front of the car.
One of the central questions of this episode was, is there such thing as bad publicity?
Or is there no such thing as bad publicity?
Because the counterargument to what we were talking about, when there were a fair amount
of supporters online for what Jaguar was trying to do, and those folks said, "Hey, listen,
it was successful because you got everybody's attention."
And I think what we were saying there, and I still believe is they were getting attention,
maybe for the wrong reasons, but given where they are in their rebranding journey, I think
that they might be able to at least tell themselves that this step was successful because
they got everybody's attention.
For the idea that there's no such thing as bad publicity, I still disagree.
But they did unveil a prototype at Art Week in Miami, and it didn't get as much attention,
however, as this rebranding.
Yeah, the rebranding still seems to be dominating.
It's not like I'm going to be going out and buying or not buying a Jaguar next week or
next year, after all, the controversy settles down.
What's interesting here is this is in stark contrast to what we saw with an Iser Bush, because
Jaguar is doubling down.
They are standing by the campaign.
You're talking about the Bud Light campaign of a couple years ago.
Yes, exactly.
Which wasn't really a campaign, but the criticism, which is fair of Bud Light at the time,
was that they ran away from it, and that just created more opening for people to criticize.
Yeah. In this case, Jaguar is standing by it, and they are making the case that this transformation,
I'm still trying to figure out which transformation is it in their advertising, or is it in their
car, but they're claiming that it's essential for Jaguar's future, and they're aiming to
position the brand as a leader in the luxury electronic vehicle market.
Yeah, I think that they were effective in letting people know that they were going to
change their image.
I don't think they gave people enough information about what the image was going to become,
or what they wanted it to become.
That's probably where this fell short, in my opinion, there would have been good, have
some value, even emphasizing electric, or emphasizing luxury, which I maybe they would
say that they did given the images that they put out, or having the prototype at art
week.
But I think it still fell short, I stand by our episode, and I certainly will be reading
with interest the response of the automotive press.
Yeah, I'm kind of curious to see how we're going to look back on this a year or two after
the new Jaguar's released.
I'm curious whether it even matters, right?
We've got a whole year.
It's an advertising campaign for the next month or two.
It's generating a lot of controversy.
Look, nothing else is happening, but their communications for a whole year.
They're not making more selling cars for the next year.
That's it, right?
So what else are they going to do?
They're essentially playing the communication game, the digital game.
I think they have an opportunity for keeping the brand alive through their communications
or digitally, right?
If they're investing in their website or mobile phone apps or different ways of, but at the
end of the day, it's not their product, right?
It's like, I still want the Jag.
It'll be interesting to see at what point during this coming year, 2025, they make the turn
and start really focusing on the product to be clear.
What they showed in Miami, I don't believe is the car that they're going to be selling.
It was a concept car prototype.
Right.
So at some point, they're going to have to make a turn and they'll be interesting to see
what their judgment is as far as lead time.
Then that car will be released.
Maybe we're just assuming that it's going to be a one year, but they may be 15 months,
maybe 18 months.
How would I know how they're paying their bills in the meantime?
I think that Land Rover is paying their bills.
But I don't know for sure.
Yeah, yeah, right.
Yeah.
All right.
Well, it's been fun taking this short walk down a memory lane.
That is our look back show for this week.
We hope you've enjoyed it and we hope you will tune in throughout 2025 as we have new
episodes.
As always, we want to thank Shawn P Neal and the PeopleForward Network for making our podcast
possible.
And if you ever want to let us know what you think about this or any other episode, please
feel free to email us at podcast@ocrnetwork.com.
Communication breakdown is a production of the observatory on corporate reputation.
I'm Steve Dowling.
And I'm Craig Carroll.
Thanks for listening and have a happy new year and we'll see you in January.
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