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

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Reputation.

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Thanks for joining us.

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I'm Steve Dowling in Silicon Valley.

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And I'm Craig Carroll in New York City.

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Each week, Steve and I take a look at 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, companies pitch in for wildfire relief.

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We hardly need to go through the background briefing for this one.

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It's been playing out in real time on your TV and in your timelines.

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Los Angeles, Altadena, Eaton Canyon, Pacific Palisades- thousands of acres, thousands of

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homes, incinerated by wildfire. Tens of thousands of residents displaced, many now homeless.

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As we record this, on January 16th, the fires have claimed the lives of 25 people.

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Damages are estimated in the range of $250 billion, which would make it by that measure the

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costliest natural disaster in the US history.

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As the fires raged, major employers and Los Angeles, notably the entertainment industry,

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were quick to step up.

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The Walt Disney Company pledged $15 million in relief aid and that figure was matched by

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Warner Brothers Discovery.

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YouTube later announced a $15 million donation as well.

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Netflix, Amazon and Comcast have all pitched in $10 million a piece, Sony and the NFL, which

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has two franchises in the LA market, each pledged $5 million.

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Several other companies and individuals have announced seven figure donations as well.

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Beyond cash, Airbnb is arranging free temporary housing for those seeking shelter from the wildfires.

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Planet Fitness made locker room showers available and countless restaurants served up free meals.

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Those are just a few examples of how companies both played their strengths and also got

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creative.

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There's no debating the necessity or motivation for the spirit of corporate citizenship,

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especially when it hits an entire industry so close to home.

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Instead, this week we look at some of the more noteworthy efforts and take a deep dive

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on how one company in particular moved fast to support the LA community.

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The company is Starbucks and if you've visited one of their stores or opened their mobile

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ordering app as millions of people do every day, you might have seen that they're using

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those ubiquitous marketing channels, not just to sell iced matcha lattes, they're encouraging

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customers to support wildfire relief, linking to a donation page in partnership with the

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American Red Cross.

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And it's not the first time they've run appeals like this during natural disasters.

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What stood out for us this time was how quickly Starbucks was able to mobilize.

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The wildfires spread across Los Angeles on a Tuesday and Starbucks had the Red Cross

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donation campaign up and running in stores the following day and in their app the day after

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that.

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Steve and I checked in with our mutual friend Dominic Carr who serves as the Chief Communications

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and Corporate AffairsOfficer at Starbucks and he says they're able to swing an action thanks

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to an established playbook and cross functional processes ready to go when disaster strikes.

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Yeah, we wanted to understand how this came together at Starbucks because they executed

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so quickly.

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From an outsider's point of view, you might think, Hey, there's a big fire, somebody turned

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on the Red Cross donations, what's the big deal?

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But there are some really key judgment points for any consumer facing company here.

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And from what we learned, Starbucks is early warning system, if you will, is usually their

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global security team, which they stress is focused on employee safety.

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That global security information feeds into a cross functional group, including comms,

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government affairs, the Starbucks foundation, their social impact team, as well as key

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operational leaders.

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And it sounds like in a case of a major emergency or natural disaster, once they know they have

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a good read on the situation from a security point of view, they can move quickly to what's

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going on in the community, what resources does Starbucks have that might be of help.

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And that's where their playbook kicks in. For situations like the LA wildfires, Starbucks

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can move quickly because first they have an existing relationship with the American Red

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Cross as well as World Center of Kitchen.

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And of course, on top of that, as we mentioned earlier, the marketing channels are a critical

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part of getting the word out to customers.

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So Starbucks can spin up in-store signs, they can do outreach to tens of millions of people

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on their email list.

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And they can implement this really critical app functionality that enables donations directly

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to the Red Cross.

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It's not as simple as throwing a switch, but at some level, they do have it ready to go,

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so they can turn it on.

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And clearly in this case, they did it very quickly.

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And for those who are listening and looking to make a donation, we're going to include

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a link to that page in the liner notes for this episode.

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I'll say for me, what was fascinating about this, I used the example of flipping a switch,

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is that, okay, sure, it's not as simple as flipping a switch, but the beauty of it is,

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it sure feels like it's flipping a switch, right?

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And it's about all the hard work, the preparation, the foresight, and being prepared.

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Of course, the world can unfold so many different ways.

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You can't respond to everything that you can anticipate and throw your resources in so

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many different directions.

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But in this particular case, right, Starbucks was ready and "able to flip the

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switch."

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But tied to that also was their ability here to -

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It's not even right to say work through their employees because what was so powerful here

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was that a lot of the work that was going on with Starbucks response was on the ground

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for through the employees themselves driven by the employees, taking ownership, taking action,

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moving on their own.

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And then Starbucks just not getting in the way and seeing the great things that their

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employees are doing and jumping it to support it, amplify it, and make it easier to flow

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and it happened.

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Yeah, one of the big questions in my mind going into this conversation was, is this a

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top-down process as you would probably expect, or is it a bottom-up process or can it be?

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And the way Starbucks described it, they're equipped for it to go in either direction thanks

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to this cross-functional organization.

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Obviously, big donation or activating that red cross-relationship happens at the corporate

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level.

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But in identifying the need, to Starbucks credit, the stores and the employees, Starbucks calls

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them Partners, they do apparently have a voice.

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And one, I thought really interesting proof point of this was that they're actually getting

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as much, if not more, or were last week getting as much attention anecdotally for a new policy

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that was communicated to their stores saying, wildfire first responders can get a free cup

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of coffee, which is just a nice gesture of thanks and acknowledgement to the work that's

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going on all around them.

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And as Dominic told us that actually just formalized a practice that was already happening

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and started with store employees who were bringing coffee to fire houses or handing them

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out to first responders and doing other community outreach that just seems neighborly, especially

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in a time of crisis.

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I think that's a great way of looking at it.

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I mean, often we talk about authenticity, but just this neighborly approach and being

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there, being in the community, taking action and being engaged at the local level.

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And right now, it's so critical given the severity of the crisis there.

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Yeah, that is tricky, though, because putting anything in front of a customer,

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let alone an audience of tens of millions of customers takes really serious consideration.

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There's the messaging consideration, the placement, the positioning of it and the cadence

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of it.

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I mean, there are tragedies and hardships every day all over the world and nobody can address

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them all. You would like to.

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But if you're doing, you hate to say too much, but if you're doing this all the time, then

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it doesn't really stand out.

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And of course, Starbucks does have an ongoing relationship, as we said, with the American

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Red Cross, World Central Kitchen.

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But this one, given the scale, it seems like a no-brainer, but somebody does have to make

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that decision.

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And to do it quickly, you need a really robust process to do it right.

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Let's look at another aspect here about how Starbucks responded.

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For me, in our discussion with Dominic, it was very instructive to hear how Starbucks

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was working on the local level, not only letting employees take the lead and empowering their

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employees or really just supporting their employees, but also the response that they had in

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terms of coordinating and aligning with the government.

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That might be something that's always there, but I think given the say to this crisis,

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it's super important.

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This is not a moment where you want to be tripping over your toes or getting in anybody

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else's way.

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And that's something that a lot of governments talk about when companies try to help is

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that they sometimes outshine by doing things their way instead of the way in which the local

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community or the government needs for things to be productive or to stay on track and to

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help everybody as a whole.

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Yeah, it's interesting because this cross-functional group inside of Starbucks, as it was described

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to us, is not just communications and government affairs.

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There's safety aspects of it.

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There's the operational aspect of it and in a crisis, as it was described, they wear two

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hats.

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Once something, this magnitude happens, the organization flips and everybody understands

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what they're doing in that crisis situation and a lot of the response is the local team

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or the local store and they're so close with they can help inform corporate decisions about

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what the community might need.

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But I found it really encouraging that there was this listening aspect, because when you

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have, I think Starbucks has somewhere in the order of 400 stores in the LA area, that's

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a phenomenal resource for a corporate affairs, corporate communications leader at corporate

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headquarters in this case in Seattle, but could be even farther away.

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And so I found that level of cross-functional coordination and having the, effectively,

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the listening post, whether it's listening to customers, listening to first responders

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and local governments, but that, I thought, was really flexing the power of having this

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huge distributed network of not just stores, but people and community members.

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Absolutely, right?

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And when we think about cross-functional, we normally think about internally, but here's

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an opportunity for thinking about it, not just internally, but externally, as they're coordinating

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and cooperating with local government officials, right?

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I mean, that's so important.

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And certainly, in moments like this, where we have crises at this scale, this is probably

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the only time that we're going to see the importance of taking such action and having

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that.

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So it certainly speaks to the need of having your government relations team connected to

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your communications team.

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And for me, it just shows, you know, from a corporate affairs perspective, right?

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The importance of working together alignment.

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And something we've not really talked about is the dexterity for being able to take action

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quickly, right?

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I mean, you've got to have the muscles, you've got to have the speed.

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And it's not something that you can do in the moment.

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You've got to be prepared for those moments to be able to move that fast.

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And I don't mean just internally.

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I mean, externally, as they work with local government officials, right?

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And they work to cooperate, align and coordinate and recognize, okay, you know, they may have

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had another plan.

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But once they heard what was needed on the local level, they could take what they had planned

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on doing and work through what was needed at the local level for what they needed, not

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helping on their terms, but helping on the terms of the community there.

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And put another way and simplifying it quite a bit.

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We'd call that being part of a community, which I think is the goal that we're hearing from

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Starbucks.

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And I think in a lot of ways, seeing play out in this wildfire response.

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Given the lack of response that I've seen, so we went out and looked at what other companies

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were doing.

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And we saw that like maybe 32 of the Fortune 100 had reported doing anything in the area.

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And we just, noting the absence of what companies were doing publicly or at least saying what

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they're doing publicly, maybe they are doing things privately.

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As for companies who aren't taking action, I think the questions that companies face here

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are what can a company do, what should a company do, and what form should that take?

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You know, we were talking earlier about this bottom-up idea that turned into a Starbucks

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policy of giving free coffee to first responders.

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But I think that authenticity makes campaigns like these so impactful companies.

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Each play a role in the market.

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They each have their areas of expertise.

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Sometimes unique areas of expertise.

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Sometimes they are leaders of a commodity sort of market.

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But when they have expertise, it makes sense for them to lend it in a time of need.

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And I was struck by Disney's idea.

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They have this incredibly creative team called the Imagineers who design theme parks among

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other things.

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And you know, Iger says maybe they'll help with urban design.

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It's an application of their expertise.

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It's something that makes sense.

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Airbnb, they know where there's available housing.

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Planet Fitness has a lot of showers.

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And Starbucks makes coffee.

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So as always, in crisis response like this, just in everyday corporate communications,

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like authenticity is the coin of the realm.

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And I think it's great to see companies leaning into that when they can be so impactful in

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a time of need.

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It's one of those situations when you say yes, them doing whatever they're doing, it just

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makes sense.

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Yeah, I like the idea of starting with authenticity.

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I think there's a little bit more there.

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It's not just about being authentic.

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It's about authenticity tied to their area of expertise or their zone of genius.

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Right.

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What are they known for?

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What are they good at?

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What are they doing the market and turning and flipping it to provide some type of community

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need here?

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I think that is huge because authenticity by itself is not enough.

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If they're not connecting to the local need and to what needs to the needs of their community,

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what has to happen now and here.

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Right.

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And let's say it without being cynical about it, it reinforces a leadership position.

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It reinforces that level of expertise and it also shows the value that a company has in

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giving back.

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Yeah.

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Right now, what I'm not seeing is a lot of self promotion, right?

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All the examples that are going on, it's very clear that all the players are focused

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on the crisis, focused on helping employees, communities and their taking action and they're

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not drawing a whole lot of attention to themselves.

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You see very little of companies promoting what they're doing.

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I mean, that was kind of refreshing, right?

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When you think about other crises and other moments, what do we think about, for example,

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during the George Floyd crisis during the pandemic or Russia's invasion of Ukraine, there

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were other moments when companies have spoken up or other disasters.

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But this one here, certainly I would say it looks like many companies are publicly silent,

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right?

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We're not seeing very much out there.

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But that doesn't really matter as much as the people who are impacted and the people who

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are affected, getting the needs that they have met at the local level, right?

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So whether it's companies simply, first and foremost, taking care of their own employees

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at the local level or working through their communities, it's very clear that they are

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not focused on this from a self-promotional aspect.

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And I think the unspoken message there is that the companies who are making these donations

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or making these relief efforts, gestures, they are focused on the work, they're focused

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on the results and helping people through this difficult time.

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I think it's important to note, maybe we should have earlier, that we reached out to Starbucks

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about this.

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They didn't reach out to us, but beyond an Instagram post when the campaign kicked off, they

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haven't done any proactive PR about it.

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And I think that's the right way to handle it.

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They don't need to do it for reach if you're a Starbucks customer.

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It's not in your face, but it's also hard to miss.

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They sent an email to tens of millions of customers, mine arrived on the Saturday of the

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11th, and I had already seen the donation link in their mobile app.

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The Balancing Act is that you want people to see it.

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You want people to see it for the right reasons.

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You're marketing it for that reason.

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And yes, it has ultimately, in the long run, it has ancillary benefits for your reputation

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and maybe for sales.

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But you don't want to push that to hard.

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And importantly, you don't want to be perceived as pushing it for that reason.

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And I think the companies that I have seen are certainly earnest in that way.

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For me, another thing that we're seeing here is that this case certainly shows that there's

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a lot more than just communications, or it's certainly about how communication needs to

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be connected to other parts of the company and company's response to crises.

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So Dominic shared with us that they were very much aware of what the employees are doing

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on the ground floor and that they were able to respond and support what was happening

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at the local level.

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Second, from an audience perspective, it did look like they flipped the switch, but it's

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very clear there was a lot of work that had to be done ahead of time to prepare for that

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moment.

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But at the end, it's not just about communications, right?

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It's not just about building awareness or getting the word out in terms of safety and security

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on the local level or building alignment here.

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It's also about connecting and cooperating, meeting the needs, being able to move quickly

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and swiftly, coordinating and cooperating here, right?

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So this degree of being synchronized and in sync, not only internal with your team, but

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in sync with the community needs and in sync with government officials and others, other

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authorities that might have more insight or more or additional resources that you need

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to play into.

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Yes, and I think that's where you really see an effective cross-functional organization

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pay off because there's no one organization that can do all of these things.

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Or would you want them to because it touches so many parts of the organization and to be

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effective, you need that coordination, that cooperation internally and to your point externally

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as well.

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But I would not discount the impact that the communications function can have during this

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because I think flipping those marketing channels and aiming them at this effort is really

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powerful.

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This is the power of a mass consumer marketing operation harnessed for good between

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email, the mobile app, in-store signs, think of them as mini billboards with traffic like

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a Starbucks can have.

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They're reaching tens of millions of people and they're handing them off to the American Red

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Cross.

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And if there's an equivalent to a selfless act in digital marketing, I think it's sending

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someone to another website.

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And of course, it's not entirely selfless, but it's a gesture that builds trust.

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It conveys some humanity.

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It shows priority over short term business goals.

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And when we talked to Starbucks, they said that they had already had just a few days after

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it, they had turned it on.

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They had already had thousands of donations and it can hopefully really have impact for

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people who are in need.

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Yeah.

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Well, for me, this is a great, this whole situation here is a great example of why we need this

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idea of corporate agency, right, of this, this ability to take action not only as a collective

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actor, but for them to say empower employees is not the right thing because their employees

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were taking action.

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It's not like they're allowing their employees to take action.

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Their employees took action and they simply supported what was occurring on the ground floor.

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Now, you could certainly say that this is a crisis and everybody's going to wake up and

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they look, you know, the house is on fire.

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We got to do something and be prepared to respond.

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But knowing how to respond and to take action and thoughtful, meaningful ways that are

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aligned with the community needs, that's huge and it's not something it's going to be done

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without worth thought because they're members of that community, right, because they're actually

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living, working, interacting with people in their community.

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And that, you know, is a gold star for any store in Starbucks or any other store network.

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I keep coming back to this idea of authenticity.

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You refer to it as the, their zone of genius, which I think, you know, makes total sense.

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And by coming at it in the way so many of these companies, I think are, which is let's

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look first at what the need is and then let's figure out where we can be most effective.

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They're coming at it in the right way.

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And for companies who have a large employee base in that area, it makes sense to be writing

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large checks because, you know, they want to have a broad impact.

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I think it's hard to knock a company right now for not making a massive donation and we

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could argue, you know, what is the right amount given the company's role in the community

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or their resources that they have.

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But I think it can be tough to look around and go, we would really like to help, but it don't

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really know where we fit in.

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And that's the type of thinking that I think has to happen prior to a situation like this.

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But I think it really does come from what is our expertise, what is our role in the community,

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what is, how do we serve the market on a day to day basis?

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And how would that fit in if the community, you know, were in need?

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And for the companies who are writing checks, I think if you're only coming to the realization

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that you need to do something because your competitor or your peer is already doing something,

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that's a problem.

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But it's broader than how you're organized around any given crisis.

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Well, that's a problem, but hey, at least they're doing something.

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It might be for the wrong reasons, but if they're able to help people, you know, we shouldn't

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discourage them from doing that.

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I think this situation also gives us an opportunity to think about a major change that's

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occurring right now.

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And I think the last time that I really thought about it at this level was, you know, during

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the pandemic.

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But what I see here is an opportunity here is for companies not to think not only about

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their situation and their employees, but look, there is a part here for the larger community.

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And you know, it used to be that we would say, you know, groups organizations exist to accomplish

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goals that only that individuals can accomplish on their own.

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And this case shows us that's not good enough.

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That doesn't scale anymore, right?

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This case shows us that it's about how organizations and their communities, right, cooperating

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and working together can accomplish goals larger than what a company can accomplish on

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their own or what the community can accomplish on their own.

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And I think, you know, we see some, you know, this with the Starbucks example that we just

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kind of went through here.

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And some of the other examples from the media industry, the tech industry, the NFL and

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the auto industry, NLA gives us some other examples here.

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But that's something I want to leave us with is that, you know, it looked certainly got

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to take care of your employees first, make sure that they're taking care of, but when

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crises like this happen, we've got to be able to think about how we can connect, not only

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cooperate and collaborate with government officials, community officials, but think about

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how working together and cooperating, we can accomplish something larger that no

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part can do on the road.

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Couldn't have put it better myself.

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And Craig, you've lived and worked in Southern California like so many folks, we each have people

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we care about in L.A. and our hearts go out to everybody that's been affected.

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And again, for those who are looking for a way to give, we're including a donation link

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in the liner notes for this episode of the podcast.

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That's our show for this week.

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Our thanks to Dominic Carr at Starbucks for insight on Starbucks wildfire

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relief efforts. And as always, our podcast would not be possible without the support of the

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PeopleForward Network and our producer, Shawn P Neal.

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If you have feedback for us or a topic you'd like to suggest for our show, we'd love to

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hear from you.

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Our email address is podcast@ocrnetwork.com or feel free to hit us up on LinkedIn.

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

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I'm Craig Carroll and I'm Steve Dowling.

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Thanks for listening.

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Hang in there, L.A. We'll be back next week.

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[MUSIC]

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