Welcome back to Communication Breakdown, a weekly 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 strategies companies are using to shape headlines and
sometimes save their skins.
It's a post-game show for PR Pros.
This week, Tariff Turmoil upends earnings season, but first a deep dive on Amazon's indecent
proposal on pricing.
And Tuesday was one of those mornings for the Amazon Comm's team.
Waking up to a Punch Bowl News headline,"Amazon to display tariff costs to consumers."
The reported plans seemed designed to match what Chinese discount retailers Temu and
Shien had started over the weekend, listing those new import charges alongside retail
prices on their website.
Punch Bowl's story said it all: Amazon doesn't want to shoulder the blame for the cost of
the Trump's trade war.
And that would over like a lead trial balloon with the White House Press Secretary Karoline Leavitt:
"I will take this since I just got off the phone with the president about Amazon’s
announcement.
This is a hostile and political act by Amazon."
Minutes later, and I do mean minutes later, Amazon was out with the statement saying that whole
tariff listing idea had only been kicked around for Amazon Hall, which is their low-cost
section, built to compete with the Temus' of the world.
But in Amazon's words, it was never a consideration for the main Amazon site, and they said nothing
has been implemented on any Amazon properties.
Apparently, that wasn't enough because the company updated its statement about an hour,
later, adding, "This was never approved
and it is not going to happen."
Turns out, President Trump had called Amazon executive chair Jeff Bezos,
Trump's campaign trail punching bag turned million-dollar inaugural donor, to express his
displeasure with that kind of price transparency anywhere on Amazon's website.
What happened next, we can only guess, but we can guess.
The message got more emphatic.
The idea now clearly dead on arrival.
Trump later filled out his customer survey.
[inaudible]
[reporters shouting questions] Great. Jeff Bezos was very nice.
He was terrific.
He solved a problem very quickly. And he did the right thing, and he’s a good guy."
Craig,
It's important to keep in mind the backdrop for that Tuesday episode.
It was the 100th day of this Trump administration, and a raft of polls are showing pretty much
across the board dissatisfaction with the way things are going under the new regime, especially
on trade and the economy.
And dominating the conversation coming into the week, a steady stream of warnings that
things are going to get worse, higher prices, and a lot more talk of shortages.
It's putting American companies in a really tough position, and this episode with Amazon
really illustrated both the sensitivities of the White House and the heightened sense
of alert, shall we say, in the private sector.
We don't know if Bezos asked how high, but the president clearly said, "Jump," and
"Jump" Amazon did.
The swiftness of their response was noteworthy, and then the second statement emphatically slamming
the nail in the coffin.
Right.
And what makes this moment so instructive isn't just how fast Amazon moved.
It's what they were managing.
Not just the pricing issue, but a symbolic power signal, right?
In this environment, transparency isn't just a policy.
It's also positioning.
If your transparency offends the wrong power center, it doesn't matter how accurate it is,
the question becomes, "Who are you aligning with?"
And that's where alignment signaling comes into play.
It's how companies stay close to sources of power without crossing the line, without betraying
their values or integrity, or the expectations of their stakeholders who might see that proximity
is complicity.
You need access, but you also need insulation.
As one CCO told me, "If you don't have a seat at the table, you're
probably on the menu."
Yes, so we're going to come back to this idea of Alignment Signaling throughout today's
episode.
And we're going to cover some of the moves that we've seen in the automotive industry as well,
which are very noteworthy.
I think about what must have gone on behind the scenes at Amazon.
Their responsiveness was really impressive and really, really fast.
So it was probably a tight loop.
And it worked.
They contained the story to one news cycle, half, I mean, half a news cycle, really.
And maybe that's to the chagrin of the White House because I think they would have liked
to beat up on Amazon a little more, judging from that swift and furious response that you
heard from Karoline Leavitt in the briefing room, but they handled it, I think as well as
could be expected.
But there was a quote in the middle of all of that that didn't get a lot of attention,
but it really resonated with me.
It was an unnamed White House official who was quoted in CNN's online story.
And CNN, by the way, was also the outlet that broke that Trump had called Bezos.
But before that, this quote really reflected this outrage at the White House over the report
of what Amazon was planning.
And the quote was, "naturally, Trump was upset.
Why should a multi-billion dollar corporation shift costs onto consumers?"
That was the quote.
And I think that's a pretty remarkable, pretty unreasonable expectation that companies
are faced with right now from this White House.
But the White House knows this is coming
and so they jumped all over Amazon at the first sign and they wanted to make it Amazon's
fault.
It's a political act, but that's not a political act.
The political act is politicizing the business decision.
So this is what companies are going to be up against, but I think the pricing transparency
is not going to go away.
It's already all over social media.
Yeah.
And I think what Amazon showed here was something that most companies, hopefully, never have
to face- a full operational, rapid response chain of command. And that tight loop you mentioned.
You know, that's a reputational infrastructure.
No layers, no leaks, just the size of motion.
And you're right, you know, this was about facts.
This was about narrative control.
The first statement was corporate.
The second was political.
And the audience for that wasn't the media or the market-
It was one person. But here's the bigger takeaway:
Pricing transparency is now a reputational trigger.
You show your cost structure and suddenly you're accused of taking a side.
And I think that's the new terrain. Even though neutral facts can be politicized, silence
can now be recast as blame.
So companies just can't manage communication,
they also have to manage interpretation.
I think that's a different game.
Yeah.
No, I think that silence definitely in this environment definitely opens you up to the
risk of being blamed.
So I think it is as much a defensive move as proactive to be out there explaining yourself.
And I think I'm sure in hindsight that's something that Amazon would have, you know, preferred
to have done or probably preferred to have put a halt to this before it ever got out.
I think about it also, just as an aside from the West Coast perspective, because this punch
pool news report came out at 2.45 a.m. here on the West Coast.
Of course, Amazon is headquartered in Seattle and Amazon has a great sort of news tracking
operation historically.
So I'm certain that somebody somewhere in the globe knew about it, but I'm guessing also
that there was a lot of operational control in the time zones that were awake and to their
credit, they handled it, I think as well as could be expected... and swiftly.
That puts a bow on the Amazon story just as they did on Tuesday with their quick response.
I think I have another good example of what you've described as Alignment Signaling.
Let's talk about it then.
I know you have given some thought to a framework of concepts that companies should be thinking
about in these situations.
But let's take a look at the automotive industry this week.
General Motors reported earnings on Tuesday, but they did not give guidance because of the
tariffs.
And they postponed their conference call to Thursday because the tariff situation was so
fluid in that moment.
Trump, remember, on his 100th day did a rally in Michigan and he gave the car makers some
relief on these stacked tariffs, which clearly they were appreciative of as we'll talk about.
But on Thursday, when GM did have their conference call, they lowered their guidance for the year.
And CEO Mary Barra released her quarterly letter to shareholders, which began with a thank
you to President Trump for what she called his "support of the US automotive industry."
Stellantis, which makes Chrysler and other models, they also suspended their financial guidance
for the year.
Ford is not scheduled to report until next week, but their CEO Jim Farley went on Fox Business
Wednesday morning, the morning after that rally by Trump and the morning after Trump gave
the auto sector that relief on the tariffs.
Farley's on Fox and his message is pretty clear-
He wants to remind us that Ford makes over 80% of his vehicles in the US.
He's going to praise the Trump administration for making the tariffs more reasonable.
He still needs some relief on auto parts to keep US made cars affordable.
And some other steps. About halfway through the Fox interview, Maria Bartram Ramos says,
basically says "we get it.
Our audience gets it.
Ford is the most US centric automaker."
I don't know if that flipped some kind of switch in his brain, but Farley's sound by Kixin
and he says, Ford is the most American company.
10 minutes later, he's on CNN and maybe he's had a little bit to think about it.
Maybe someone from the comms team has said, "Hey, that most American thing really worked."
But see if you can detect the messaging thrust of this CNN interview.
We've clipped together the highlights for you.
"Ford is the most American auto company.
We make 80 plus percent of our vehicles here.
And Ford is an American company.
You know, we're the most American company.
So if there's any company that can manage through these tariffs, it's Ford.
You know, next week I think we'll be able to tell people kind of what the tariff bills
for Ford would look like the most American company.
So we're building two brand new factories in the US and we're the most American already."
Okay.
So clearly he made his point and everybody got it.
But should also we can spend some time contrasting this with Mary Barra who this week was on
Thursday on CNBC following that shareholder letter and the earnings call they had.
She said on CNBC that she shares the president's goal of having a strong manufacturing base.
You know, she talked about GM being committed to increase manufacturing jobs in the country.
It's not committing exactly to what Trump wants, which I think is new plants, which is
something that as you heard, Farley already has them in the pipeline.
Barra was also last week at the Semaphore conference in Washington, which seems to have really
made us splash by the way as conferences go.
And similarly taking a very diplomatic approach.
So we have a contrast here of two CEOs where you've seen, I think, Farley go much farther,
much more animated than he has been in the past and very much embracing this idea
of Ford as the most American company.
What does this tell you about the Alignment Signaling that Ford is doing and there's lots more
to talk about in the automakers?
Yeah, yeah.
I'm going to contrast it with Mary Barra's response.
So she's taking what I call an institutional approach.
She's respectfully nodding to the president.
No clear alignment on policy goals, manufacturing jobs, stability and all that, but no personal
language, no promises and definitely no sound bites.
She's signaling the alignment without stepping into performance.
It's very careful, composed, very stakeholder-safe.
And her styles were restrained.
She's leading with things.
She's echoing Trump's manufacturing goals, very policy-focused.
She's signaling respect for the office, but not necessarily allegiance with the person.
Farley on the other hand is a little bit more about cultural alignment.
He's leaning into American identity.
He's talking US production and he drops the sound bite that Ford is the most American company.
Look, that's what I'd meet for the current environment.
But again, he's stopping short of over-comittng.
No promises, no plans, just signals.
And I would say his version is also identity-forward, saying that Ford is the most American company on repeat.
That's not just signaling alignment.
I think he's draping in a flag.
He's speaking to Washington, sure, but he's also trying to speak to consumers, workers, and competitors.
So he's trying to make it play across networks.
Look, it's two different styles, but it's the same function and the same message.
Stay close to power without looking like you've been captured by it.
That's at the heart what alignment signaling is about in a Trump 2.0 world.
Proximity without submission.
It's alignment signaling in stereo, but the styles couldn't be more different.
Yeah, I think what we're seeing from both car makers is not actually an effort to communicate
to that broader audience beyond the business eyes.
I think they're communicating to an audience of one.
And in both the automakers and the Amazon example, I think the executives and the comms teams
have figured out that there are no points for subtlety these days.
We're not leaving anything to chance.
But Farley, I think, does deserve credit for going out there and making a strong effort
to explain Ford's position, remind people of what they do.
I don't know where that message has been for the past six months.
Maybe I missed it, but Farley's reputation in the industry (is) that he's a car guy.
And when he talks about his company, he brings tremendous credibility.
He's a leader.
And being able to take the role of educator is a really powerful one.
And in those clips, yes, he got repetitive-
We make a little fun of it-
I think he's pretty effectively trying to influence the definition of 'American' in this case.
What it means to be an American company.
Barra, unfortunately, I think, has not done the same this week.
The expression to Trump and her letters didn't land with me.
It didn't feel like a position of strength.
But both car makers, I think, are doing their best to make the message something other than
uncertainty.
I think that's what you're seeing.
Yeah.
They're talking about how they want to hold the line on pricing, no one's making any promises.
They want to increase production in the US.
Ford has two plants in the works.
I'm sure Trump will take credit for that.
Farley is happy for GM to take some more heat and pressure for that rather than Ford.
But the situation, as fluid, changing as quickly and unpredictably as it is, the clear and consistent
voices are the ones I think who will best define the debate.
Steve, I agree.
I mean, Farley's not just defending Ford.
He's actually shaping the narrative.
He's trying to define what 'American company' means under pressure.
And because he's a car guy, right,
it lands with credibility.
He's not just reading a script.
He believes it.
That gives him the runway.
In contrast, Barra plays, I think, a shorter game, gratitude, but no real imprint.
It looks, tone matters.
Gratitude without grounding certainly feels like posturing.
The audience doesn't feel the conviction.
I think they just hear caution.
The stability and messaging becomes a competitive advantage when everything else is unpredictable.
But in this environment, in this media environment, the loudest voice doesn't just interrupt the signal,
it tries to override it.
So you've got to speak early, got to speak clearly and often, or risk being spoken for.
But I also think, Farley speaking a little too loud personally.
He says "the most American company," like five times across two networks, it starts to feel
a little like over-signaling.
And there's a moment here where clarity can cross into the performative zone.
Say it once, its conviction.
Say it five times (and)
it starts to feel like it's a test that you're trying to pass.
So I think there's a little bit of a volume dial here.
I agree.
That's sort of what is annoying about this environment is that it sort of has to play
out on TV and in the messaging like this, like these over-the-top displays.
But, and I do think at some point you put your credibility at risk.
But I think that's clearly what Trump wants.
Like he wants people out there, you know, parroting his ideas and praise to the point of obsesqueousness.
That's not a good look for business leaders in the long term.
But I think what people have figured out is that that's what works.
And maybe that's what Farley was leaning into this week.
Maybe he sort of tested the limits of it.
But if we think coming into this week, we would have said that GM has played it better because
Barra has been working behind the scenes, very little public exposure. Spoke at a
conference last week, but there was no recording of it out there.
And that Farley had tried earlier in the year, remember, he had his famous quote of costs
and chaos, which we have reported many times on this podcast.
But I think that we would have said that Barra was being more successful.
And this week Farley comes out and he really leans into what Ford has done.
He's trying to redefine what it means to be an American company, the most American company
in the eyes of, I assume, the White House.
And I think he has flipped the script.
Yeah.
Well look, he came out swinging, you know, he framed the issue
as causing chaos as you mentioned. It makes Ford look proactive, even bold.
But I think that framing also locks you in.
You know, once you name the problem that directly... But that's the old Ford position.
I think they have, they have changed.
Now, now he's, "we're the most American."
He's gone from a critical posture earlier when he was just a warning posture before.
And he was out further than any other car makers on that.
Now he's saying like, we're the ones to beat.
We're the ones who are clearing the bar, Mr. President.
We're the ones who are the most American.
We have the two plants in the pipeline.
And he's saying explicitly in that CNN interview, if you listen to it, he says, why aren't
our competitors doing the same?
So he's trying to shift the pressure to specifically, I assume, GM and Stolantis.
Well, you know, most of these companies don't support the tariff policy, but they also can't
afford to look oppositional.
Yeah.
So they're hunting for shared ground, saying things like, you know, we believe in manufacturing
or we want American jobs.
It's safe.
It's broad and it gives White House something to clip.
But as pressure mounts and Trump starts looking for symbolic wins,
broad values won't be enough.
He'll want action, not applause and headlines, not handshakes.
So I think the real challenge for CCOs is threatening that line, you know, signal enough alignment
to stay in the room without signaling so much that you lose your base.
Yeah.
I think that's right.
And Alignment Signaling is a good calm strategy.
It's a good tactic in any circumstance, just as generally being aligned is a really good
thing.
But I think the reason so many are just signaling alignment, as you say, is that they're
really not aligned with the terror policy.
They're trying to make the best of it and figure out a way to steer the administration into
something that's more palatable.
So they've got to find--
And to stay in the room.
Yeah.
Well, you can't make any change if you're not in the room.
So they've got to find some common value to build on.
It's a tough spot to be in, but I think Jim Farley of Ford kind of found it this week and
we'll see how that plays out.
Let's talk about your thinking on alignment signaling.
And you have developed this framework, which has a handy acronym.
Tell us about what the thinking is here and how companies can apply it when they need to
signal positions that might be as you have described a little awkward because you don't
agree, but you need to stay engaged.
Yeah.
Look, so this is the beautiful thing about getting to talk to senior executives every day, right?
I mean, something that we've always been doing forever is addressing multiple audiences.
But I think what's different now is that in some respects, it appears that companies are
in a spot of where it looks like they're backtracking on their commitments.
So the challenge is, how do you signal allegiance and agreement or your participation
with the administration without undermining your history, your relationships, your integrity
and keeping your commitment to your core groups?
I think that is sort of the challenge right now at the heart of it.
And so this acronym that we came up with was all about the heart of what Alignment Signaling
is all about.
Access, right?
You have to be able to stay in the room as you know, as we talked about earlier in the
podcast, if you're not, if you don't have a seat at the table, you're probably on the
menu.
That's the heart of the idea here.
So ACCESS is keeping front and central what the ultimate goal is here.
So it's also an acronym, right?
A: Acknowledge the environment, C: Calibrate public proximity and Contain the message.
E: Gott engage with policy, not via personality.
And then the two SS's: Signal stakeholder awareness and Scenario test the blowback, because there
will be blowback.
As we have seen. Okay, there's a couple here that I think are really interesting as we apply
it to what we've seen this past week with both the Amazon situation as well as the
car makers, but acknowledging the environment, I think is a really, really interesting one.
Talk about how, I think the car makers are the best example here, but how they've demonstrated
that aspect of your framework.
Okay.
So, I think this idea of acknowledging the environment is recognizing that this
is not all good news right now.
In a Trump 2.0 environment companies are being pulled into the spotlight pretty fast.
The loyalties are getting tested in public and neutrality can get framed as betrayal.
So every business decision, you got to be aware of... it can be politicized.
So this idea here is that, acknowledging the environment, you can't pretend that the
political climate is neutral.
You have to name the pressure.
And that means, inTrump 2.0, everything from pricing, the hiring, the philanthropy
can be turned into some type of loyalty test.
So you know, acknowledging the environment means being honest internally and externally
about the symbolic risks you're engaging.
And for Ford, I would say they did that fairly loud and early, you know, Farley names the
chaos.
He hits the cost.
He made the environment a key part of the story.
And GM did it very slow and cautious. Barra stayed quite early and then eased
in with language like clarity and consistency.
I'd say Ford named the storm and GM waited to see if the forecast was going to change.
And so much of these calculations, I think, are about balancing how you present the issue
because you need to maintain credibility, right?
The easiest thing in the world, we just go all in and say whatever it takes.
But in the long term, that's not going to go well for you, especially when you're
in a situation like this where you know the policy is not good
and you'd rather that it be something different.
But I think what Ford did really well this week is they leaned into stuff that nobody could
really argue with.
I mean, this is one of the things about alignment signaling is that you look for the common
ground.
It's the basic concept.
And you accentuate the things, you know, this, ideally there's, we have more things in
common than we, than we differ on.
But Ford really found stuff that I think is hard for anybody to argue with.
The jobs that they have here, the efforts that they are making, the factories that they are
going to add.
So it's, it goes beyond what we've seen with a lot of companies where they say, 'we agree
with the idea of leveling this playing field, we agree with the idea of long term boosting
manufacturing.'
But Ford's able to do is say, 'we're already on it.'
Yeah.
The message that would have served them well, I think before now, but what the heck, they're
here.
Yeah.
Look, I think that's a good example.
This idea of the first calibrating public proximity.
Ford leaned in close- Fox, CNN, the whole circuit - proximity is presence.
And in contrast, right, GM kind of kept distance.
They let the earnings do the talking, used more formal channels like the shareholder
letter and semifor.
So yeah, you know, Ford stepped into the spotlight.
GM stayed behind the curtain.
You still got to decide how close you want to peer to political power and how far you need
to be seen.
And with Trump back in the arena, you know, even showing up in the wrong photo can be a headline.
So, you know, calibration largely about visibility management who's in the room who's watching
from the hallway and what your presence communicates.
Well, let's talk about one more of the letters in your acronym.
And that's the next C, which is "Containing the messaging risk."
Yeah, I think that Amazon really did a good job of this sort of reactively.
I mean, ideally, you would have contained the messaging risk by, you know, looking at this
potential proposal, but who knew that it was going to become public?
Because we don't know how fully baked that idea was.
They were very emphatic that it had not gone up the chain.
I don't know what the reality was, but talk a little bit about what we've seen in terms
of containing messaging risk this week.
So, yeah, this idea of containing the message risk means basically tightening the loop,
right?
Limit who speaks, align quickly, avoid statements that can be reframed as pledges or
attacks.
And for Amazon, they issued two statements within the span of an hour.
The first said the tariff display had been kicked around, but not implemented.
And the second slammed the door: not approved and not going to happen.
And that, that second statement wasn't just corporate cleanup, it was political containment,
right?
It wasn't aimed at clarity.
It was in a Trump and it worked.
But here's the risk, right?
In trying to kill the story fast, Amazon left a room for nuance and no signal to stakeholders
who might have appreciated the transparency.
So, you know, Amazon contained the blowback, but they also muted the message.
I think the fix worked, but the story got flattened.
I think this is a really interesting framework that you've come up with.
I'll go over it again.
You said ACCESS six letters: A- acknowledge the environment, C- calibrate public proximity,
C- contain the messaging risk.
E- engage via policy, not personality.
S- signal stakeholder awareness.
S- Scenario test the blowback. Really interesting stuff.
Any final thoughts on that framework?
If you're going to use this framework, there's certain conditions that have got to be in
place.
You got to know what your floor is, when you're not going to fall below no matter what the
pressure is. You've got to recognize that trust has earned through behavior, not crisis statements.
You got to be able to engage from policy, not personal loyalty.
I think a big one is you also, if you're going to employ the strategy, you're going to have
to make space for internal dissent within your company.
So certainly the long game anchored in values, but whatever your next move is, it's got to be anchored in
principles and you got to have the courage.
I'm going to say moral imagination to look beyond trade-offs because trade-offs is what
first comes to mind for people.
They're balancing stakeholders here and you've got to find a way to think beyond the balance
and to think about how you can transcend the conflict that is facing us during this particular
moment.
No small feat, but always, always food for thought.
Craig, I think it's a really interesting one and it's definitely something that is going
to be a lot of opportunities for comms leaders to apply in the coming weeks and months.
That's our show for this week.
We want to thank Shawn P Neal and the team at AdvoCast as well as the People Forward
Network for making our podcast possible.
If you have comments or suggestions for the podcast we'd love to hear from you, our email
address is 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. We'll be back next week.
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