Month: April 2016

One of the most robust electronics markets has stalled in its growth.  Manufacturers from Apple to lesser known Chinese brands were selling smart phones by the tens of millions with huge jumps each quarter in shipments.  Now that has stopped.  The market is flat.  Everyone who wanted a smart phone has one.  Growth has turned to conquest sales — booting out a competitor’s phone in favor of yours.  It is time for a change in marketing and PR.   Apple, in particular, will need to learn how to compete in a commodity environment.  It has long depended on the “cool” of its products with extensive features and functions to carry the day.  Now it is trying to go downscale to appeal to the masses who cannot afford its high-priced approach.  This could be a problem for the company, which has long depended on making new markets in which it dominates.  No one is worried about Apple yet, but its stock is under pressure and questions are being asked.  Every market hits maturity — some faster than others.  The smartphone had a good run, but it’s over.

The FBI is scrambling to correct flawed forensic analyses that go back decades.  In this case, it turns out that hair sample examiners had given inaccurate testimony on matches in 95 percent of their cases.  The FBI found that 26 of 28 hair examiners in its forensic laboratory overstated evidence in support of prosecuting attorneys.  It is a black eye for the Bureau, but one the FBI is trying to correct.  The question arises of how this happened in the first place.  The answer appears to be that the forensic examiners were eager to put “bad guys” away and saw no problem in confirming matches that weren’t really there.  This is one more instance that shows how dangerous the power of government can be and why it needs to be restrained.  It is hard to give kudos to the FBI for cleaning up a mess of its own making, but there should be some recognition of the Bureau’s efforts.  It could be resisting efforts to fix the problem — a not uncommon response from bureaucracies.  What the FBI can’t fix are 14 executions of criminals based on hair sample evidence.

Fortune has written an article that is a case study for anyone interested in PR and crisis communications.  It has to do with instant noodles called Maggi made by Nestle.  They are sold widely in India and were the favorite of mothers for children, cost-conscious students and others looking for a cheap but nutritious snack.  The crisis began when an Indian laboratory discovered elevated lead levels in a package of the noodles.  Nestle said that it wasn’t possible and that its own advanced laboratory hadn’t found anything of the sort.  When the news leaked to the media, a firestorm resulted and Nestle had to pull tons of noodles from the market   The problem was partially of communication, which was poor, and an arrogance on the part of Nestle, which exacerbated the problem.  The article is lengthy but it merits a read.  One questions whether Nestle has learned how to communicate in a crisis as a result of this.

When a primary care physician is already overloaded with responsibilities, asking him/her to do more is poor management and poor PR.  Poor PR because it is tasking them to take on yet another burden in dealing with an endless stream of patients.  Yet that is a proposal for ending abuse of opioids.  Activists want doctors to consult a database to check if opioid users are doctor shopping to feed their habit.  There are several things wrong with the idea, not the least of which is that someone has to maintain and update the database and that someone is almost certainly the primary care physician or the doctor’s staff.  There needs to be a better way to stop abusers and good PR should be the reason for finding it.  Primary care is the first line of treatment and hence, it should allow doctors time to assess and refer patients, if need be.  Unfortunately, primary care has become an assembly line for many doctors in order to handle the patient load — 15 minutes and out the door.  That is barely enough time to figure out what is wrong with the person and what should be done.  It  becomes too easy to write a prescription and go on to the next patient.  Opioid abusers know that.

The auto industry is under stress because of Volkswagen’s cheating.  Manufacturers are trying to steer clear of the controversy but regulators are on the hunt.  We now know that Mitsubishi diddled its test results as well and investigators are looking into Peugeot.  So far, American manufacturers have avoided official action but that doesn’t mean they are off the hook.  The effects of the Volkswagen dishonesty will reverberate for months if not years.  It is a watershed moment for the industry and anyone who might be thinking of getting around regulation is on alert.  Volkswagen’s managers must be asking themselves why they were so stupid.  Other auto manufacturers are furious with the company as well they should be.  They have been tarred  by association.

Blood testing company, Theranos, is under investigation by the Federal Government for making false claims for its products.  This is proving to be a PR disaster for Walgreens, the drug store chain that was using and promoting Theranos devices.  The question is when Walgreens will formally break with Theranos to stop being tarred by association.  Observers have wondered since the beginning of the Theranos saga months ago why Walgreens persists in its alliance with the company and its faulty droplet testing product.  Granted that the drug store chain stopped opening wellness centers that use Theranos products but it has proceeded cautiously on any final break with Theranos.  That means it is hurt by every negative story that comes about Theranos, and Walgreens’ reputation is ruined along with its vendor.  Few believe that Walgreens is contractually bound to Theranos.  There are clauses in nearly all agreements for breaking a relationship due to the criminal behavior of one or the other parties.  Maybe the full story will come out in the months ahead, but until then Walgreens is in a perilous position.

Harriet Tubman will replace Andrew Jackson on the front of the $20 bill.  She was supposed to replace Alexander Hamilton on the front of the $10 dollar bill, but Hamilton fans objected — strenuously.  Using the power of PR, they got the decision changed.  It makes sense.  Hamilton was the founder of the fiscal process that runs the United States.  He was anti-slavery.  He was the brilliant exponent of the constitution in the Federalist Papers.  He had worked his way up from poverty to be a renowned lawyer in New York.  Jackson was a man of violence — a slave owner and persecutor of indians.  He killed the National Bank of the United States, which put the country on a perilous course throughout the 19th Century and into the early 20th.  One wonders why the Treasury Department chose to replace Hamilton in the first place. But, it listened and acted, and everyone seems satisfied.  Welcome, Harriet, to the $20 dollar bill.

Amazon has the reputation of being the world’s online store, but to its employees and ex-employees, it has a reputation of being an onerous employer.  One wonders how much longer it can grow with a reputation as a brutal place to work.  At some point, it won’t be able to recruit talented workers because they will know before going in that Amazon is undesirable. Jeff Bezos doesn’t appear to be publicly concerned about what employees think.  As founder of the company, he is the principal driver of its culture and the unhealthy environment, which employees claim exists, stems directly from him.  He and his executives will have only themselves to blame if workers take action against the company.

You need a fast response when something like this happens to your company.  Alaska Air knew it had a ticking time bomb if it did not repudiate the scam free ticket offering at once.  As the company noted, it watches social media constantly and was able to pick up the phishing expedition quickly.  Imagine if it didn’t.  Thousands of people would be coming to the company for free tickets that do not exist, and it would have been a PR crisis.  Kudos to the people of Alaska Air for cutting off the hackers at the pass.  They shouldn’t congratulate themselves too strongly, however, because it can happen again at any time.

It was a relief to spend a week in London and Scotland away from endless campaigning in the US.  Over there, however, the question of Britain leaving the EU consumes the airwaves.  Brexit, as it is called, has spawned thousand of interviews and numerous talk shows.  Add to that the press attention to the Panama Papers and David Cameron’s inadequate defense of his finances and it made for a stimulating week in a foreign land.  Not that I watched TV the entire time, but we would flip it on after a long day of walking London or Edinburgh.  It was good to get away and see how public relations works in another country.  Cameron’s defense of himself was done during Question Time in parliament.  British politicians know how to cut and thrust with the best verbal warriors.  So, the UK is in turmoil, but not about elections.  There is something comforting about that.