Month: March 2018

It is time for weapon manufacturers to account for the morality of their business. Guns in and of themselves are neutral technology, but what is done with them carries responsibility. It is telling that Smith & Wesson, the builder of semiautomatic weapons used in several massacres avoided speaking with demonstrators outside its corporate offices. The company is not ready to talk and might be hoping the issue goes away once the hubbub of the Parkland shootings subsides. But, even if it does, that does not change the issue. Too many of its guns are being used to murder people. It needs better safeguards for who purchases its weaponry. This will not be easy to do. The company loses control over its rifles once they leave the factory and are shipped nationwide. What S&W can do is to take a public stance on gun control and stop selling the AR-15-like rifle. Admittedly, it would be a hit to the company’s bottom line, but like restrictions on the purchase of tobacco, it needs to be done.

Elizabeth Holmes, the former CEO of Theranos, is earning the wages of hype. She is paying a $500,000 fine and is barred from serving as an officer or director of a corporation for 10 years. All this comes from overstating and lying about the efficacy of her company’s product for blood testing. She raised $700 million from investors through telling tall tales. She deserves what she is getting and is lucky that so far, she won’t be suffering jail time. This should be a warning to publicists and PR practitioners who are tempted to bend facts to make a case. Don’t do it. The consequences when they come are severe and one will carry a stain on reputation for the rest of a career. I suspect Holmes did not set out to lie.  She felt pressure to perform and began to exaggerate. The exaggeration grew until it no longer had a factual base. She then had to lie more to show progress when her analyzers fail to perform adequately. She felt she couldn’t tell the facts because her company might collapse. Instead, she fed the hype until the truth came out and the game was over. Now she must bear the burden.

At General Electric, you know when you haven’t done well if your bonus is cut. Imagine doing without it at all. That is the case this year at the ailing conglomerate. Only one of the top executives received any merit compensation. The others are doing without. This was a shot across the bow of GE’s managers to right the ship before it sinks. Their attention is concentrated now, and either they are working harder or they are looking for ways to get out the door. There won’t be much traction for them if they stay and manage as they have. There is no argument any longer that Jeff Immelt left the company in a mess. The focus now is to find a way forward even if that requires selling off divisions and shrinking the enterprise. Can GE be great again? Probably, but it won’t look the same.

The governor of California, Jerry Brown, decided that what the high-tech state needed was a high-speed train. So, he promotes relentlessly a proposed link between Los Angeles and San Francisco that will pass through the Central Valley. As most boondoggles are, it was under budgeted and far too optimistic in timing.  The project is already a PR disaster. The next governor will have to decide if the state will keep funding it or will let it die a natural death. The plan was never thought through or its boosters lied about the timing and cost at the beginning and are only now fessing up to the real numbers. This is another feature of boondoggles. The objective is to get shovels into the ground so a project takes on a life of its own, which is hard to stop. Right now, the California High-speed Rail Authority is building a line to nowhere without any key links in place. It is too early to say the project will end with the next governor, but it is on its death-bed.

Elon Musk is his own best PR practitioner. His most recent appearance at SXSW over the weekend allowed him to talk about his vision for settling Mars. It seems outrageous and utterly impractical, but he said he will have his Mars rocket ready by next year and he will start testing it in short flights  He is also working on his spaceship that will be ready at the same time.  It is hard to bet against Musk. He is the founder of Tesla and SpaceX. His Falcon rockets are taking off regularly from earth and putting satellites in orbit. But, colonizing Mars with a million people is a dream. Mars is closer to Antarctica where a few dozen people winter over at the South Pole. It has never proved practical for large-scale development. The environment is too hostile. Still, the man has his dream and he is willing to put his millions behind it. One hopes he doesn’t go broke pursuing it.

The news that the doors to the office of the Interior Secretary will cost $139,000 has raised concerns, especially after the HUD secretary spent $31,000 for a table. The spokeswoman for Interior made a strong case for the replacement and emphasized that the Secretary didn’t know the cost of the project. Still, it is a matter of perception. The expenditure seems outrageous, and therefore, in the minds of many, it is, despite a lengthy explanation for it. This is an ongoing PR challenge to anyone working in Washington DC. The news media are merciless in reporting what appears to be self-interest on the part of political appointees. The Secretary of the Interior now has a flap on his hands, not of his own making, that he needs to handle. He can cancel the project but that will harm the building. He can let the work go ahead but restrict its budget, but that might result in a poor job. He can let the repair proceed as is and take the heat. There is no good outcome.

In my opinion, weather forecasters have low credibility, particularly when it comes to storms. They tend to hype the possibilities. The real-life situation on the ground may be, and often is, quite different. Over the years, I’ve tended to ignore them and go about my work. Yesterday proved to be an eye-opener. The forecast was for a major nor’easter to hit the Tri-state area with six to 12 inches of snow. I left for work in the morning and there were barely flurries. During the day in Manhattan there was a mix of rain and snow. When I left for home and exited the train tunnel to New Jersey, there was about six inches on the ground. By the time I got home two hours later after commuting snafus, there were 18-21 inches of snow in the front yard. The weather forecasters had called it correctly for our state. My family was upset with me for going into Manhattan. It turns out my credibility was shot and today, we’re trapped in the house since the plows haven’t come to open our road. Next time, I’ll pay closer attention.

I wrote about an MIT study of Uber and Lyft and the low income of their drivers. It turns out the study was wrong, and its author has publicly admitted it. He is now in the process of recalculating his work. The two companies promptly rebutted his research because it was a PR threat to them. Well they should have. The problem was an ambiguous survey question. It is difficult to write clear questionnaires and the researcher proved once again that even experts have problems. The paper will go back to the academic mill and might be reported out in a few weeks or months. By then its impact will be mitigated. The lesson here is that PR challenges come from anywhere and need immediate and factual response.

United Airlines is embarrassed for what it almost did to employee bonuses. It had proposed to take away individual rewards and to conduct a lottery in which one employee would win $100,000 each quarter and other employees would win vacations, cars and/or cash prizes. Needless to say, the proposal didn’t go down well with its workers. They revolted and the airline put the program on hold. The message was clear. Don’t take away my bonus. An external observer might say the unhappiness was to be expected. Individuals depended on the bonus and to see it turn into a game of chance was maddening. It meant that most employees’ hard work would go unrewarded. United blundered internal relations on this one. It was smart to pull back as quickly as it did.

The end game for many Uber drivers is poverty. They don’t earn enough from driving to make a living. Uber is not alone in this. Its competitor, Lyft, has the same challenge. This presents a PR problem for both companies. If drivers become convinced that ferrying passengers is a mug’s game, they will no longer do it. Then where will the two services be? Statistics show an extremely high turnover in drivers per year. On the other hand, if fewer drivers work for both services, their average income will rise and they might make a living. This would lend credence to limiting the number of drivers in a region to make sure they can survive. So far, neither service has appeared to do that. High tech is not always better.