Jenner Pays for Frye Festival Post
The U.S. Federal Trade Commission (FTC) requires that paid endorsements are not misleading. Celebrities like Kendall Jenner cannot post support on social media for a product or organization without specifying that she is being paid to do so. The FTC publishes Endorsement Guides to clarify responsibilities.
Jenner promoted the 2017 failed Frye Festival, implying that Kanye West might perform. Although she was paid $275,000, she didn’t reveal the sponsorship. She has since been sued and will pay a $90,000 settlement, which may help some of the many associates of the festival who lost money in the venture.
To learn more about what happened to the Frye Festival—a major public relations and communication failing—see documentaries on Hulu and Netflix.
Discussion:
What are the ethical implications of celebrities endorsing products?
When a celebrity endorses a product, are you more likely to buy it?
If you’re familiar with the festival, describe what went wrong.
A Leader Example in My Book Is Charged With Conspiracy
I was sad to see that Paul Kruse, former CEO of Blue Bell Creamery, has been charged with covering up the listeria breakout in 2015. In my book, Building Leadership Character, Kruse is a positive example of a leader who demonstrates vulnerability. His 2016 video announcing employee layoffs after the breakout was emotional and authentic.
Prosecutors say that Kruse delayed recalling tainted products, instructed employees to tell customers that product delays were caused by mechanical problems, and failed to take other appropriate action.
Blue Bell agreed to pay $19.5 million to the Department of Justice and posted a statement on its website, which focuses more on the future than on the past.
Discussion:
Can you reconcile both perspectives of Kruse as a leader? Could he be someone who covers up listeria and someone who gets emotional when talking about employee layoffs?
Assess the company’s statement. Who are the audiences, and what are the communication objectives?
Companies That Returned Federal Funding
Controversy swirls as companies grapple with whether to keep or return federal funding for the COVID-19 crisis. Distributions from the Paycheck Protection Program (PPP) seem unfair as some small businesses—the intended recipients—can’t get forgivable loans, while some larger businesses received millions of dollars that, at least in some cases, isn’t needed as emergency funding.
As the first and most highly publicized company, Shake Shack returned $10 million. Forbes tallies several others, including Ruth’s Hospitality Group, Sweetgreen, and the Los Angeles Lakers.
Store image source. Food image source.
Discussion:
What’s your view of companies that returned money compared to those that didn’t?
How should a company decide whether to return the funding?
Shake Shack doesn’t include a press release on its website or a tweet about the decision. What’s your view of this approach? Should the company promote the decision more boldly? Why or why not?
Lysol Disputes Claims of Cure
During his press conference, President Trump questioned whether disinfectants could be used internally to fight the new coronavirus:
“I see the disinfectant that knocks it out in a minute, one minute. And is there a way we can do something like that by injection inside, or almost a cleaning? Because you see it gets inside the lungs and it does a tremendous number on the lungs, so it would be interesting to check that.”
The president later said, “I was asking a question sarcastically to reporters like you just to see what would happen.” But Lysol executives are concerned that people may take the idea seriously and try to treat themselves. Reckitt Benckiser, which makes Lysol products, issued a statement, “Improper Use of Disinfectants.”
Discussion:
Watch the president’s comment during the press conference. What’s your view of his speculation?
Analyze the Lysol maker’s response. What works well, and what could be improved? What is appropriate or inappropriate for a brand’s parent to dispute the president’s claim in this way?
Improving Column Charts
So many charts about COVID-19 could be improved. Here’s one from a Business Insider article, which compares death rates for the flu and COVID-19.
Discussion:
What issues do you see in the graphic? (Hint: Check the x axis, and describe what the percentage on the y axis represents.) How would you fix the problems?
What are the consequences of designing charts in this way?
Find another recent chart to analyze. In what ways does the graphic convey information accurately, and how does it fall short?
Luckin COO Fabricated Sales Data
Luckin’ Coffee, China’s largest coffee chain, is suffering the consequences of publishing false sales numbers. Ernst & Young discovered the misconduct, which took place in 2019, during an audit, concluding that “management personnel engaged in fabricated transactions which led to the inflation of the Company’s income, costs and expenses.” An investigation blames the chief operating officer and others.
A report details “the fraud and the fundamentally broken business,” including “smoking gun” evidence and “red flags.” The anonymous authors compare video recordings of store foot traffic to reported sales.
In response to the news, Luckin’s stock declined between 75 and 80%. Starting in February, when the anonymous report was made public, the company has been posting notices about the situation on its website.
Discussion:
Analyze the anonymous report, including the audiences, objectives, organization, writing style, etc. What works well, and how would suggest that the writer improve the report?
How well did the company address concerns? Begin with the first response in February.
What leadership character dimensions does this situation illustrate?
WHO Official Bungles Interview
World Health Organization (WHO) senior adviser Bruce Alyward wanted to avoid a reporter’s question about Taiwan becoming a member of the organization. A video of the interview shows an awkward exchange, with Alyward remaining silent (but we still see him moving and hear sounds), saying “Sorry, I couldn’t hear your question,” asking the reporter to move onto another question, and then, finally, ending the call. During a follow-up call, Alyward refers to China and then abruptly ends the call.
Taiwan has had good success in controlling COVID-19, and the government claims to have warned the WHO back in December 2019 about the contagion.
As of today, Alyward’s name is removed from WHO’s website listing advisers to the organization.
Discussion:
What is a better way for Alyward to have handled the reporter’s question?
Why do you think the WHO ignored warnings from the Taiwanese government?
Email Scammers
Remember those quaint email scams that were riddled with grammatical errors? A Wall Street Journal article describes new, sophisticated training for email scammers in Africa. A Nigerian is quoted: “You know how you guys play baseball when you are growing up? Here many of us learn fraud.”
Former scams involved people sending email asking for money for people in trouble or promising big returns on small funds. Today’s scams involve hacking into accounts and people learning about connections, for example, what vendors a company uses. A fake invoice to a known vendor is more likely to get paid. Using a grandson’s real name could lead a grandmother to Wal-Mart to send money to him, which happened to my friend’s mother.
About $1.7 billion was lost to email scams in 2019, and complaints are rising steadily. The article describes a “grooming” process “like organized crime.”
Discussion:
We hear a lot about victims’ vulnerability, but what creates a culture of scammers? What makes people vulnerable to commit this fraud? For more about this, watch The Weekly documentary about love scams on Facebook.
What’s your view of the bar chart in the WSJ article? How could it be improved? Would you prefer a more creative graphic, or does this work as is?
Comparing Headlines About the Market
How does the media describe the recent stock market decline? Let’s compare a few headlines:
Dow falls 1,191 points -- the most in history (CNN)
Coronavirus Drives Stocks Down for 6th Day and Into Correction (New York Times)
U.S. Stocks Slide Into a Correction as Virus Fears Show No Sign of Easing (Wall Street Journal)
Dow's point drop worst on record as stocks fall into correction (Fox News)
Dow drops 1190 points amid coronavirus fears, S&P 500 sees fastest correction in history (Yahoo Finance)
Of the five, Fox is the only one that didn’t place a headline about the market at the top of its web page.
Discussion:
What do you make of these headline choices, including placement? What might the wording indicate about the media group’s beliefs or audience?
In class after a previous decline, I took issue with headlines like CNN’s. Do you see an issue? (Hint: What does a raw number tell us?)
Wells Fargo Former CEO Banned
In what the Wall Street Journal calls “unprecedented” and “an extraordinary sanction for a top executive at a large bank,” former CEO John Stumpf has been barred from the banking industry. The decision—and a $17.5 million fine—were part of a settlement between Stumpf and the Office of the Comptroller of the Currency (OCC) for millions of fake bank accounts created at Wells Fargo.
The OCC concluded that Stumpf should have known of the systemic problems and that “there was a culture in the Community Bank that resulted in systemic violations of laws and regulations.” When the scandal became public, employees complained of extreme stress because of pressure to sell more bank products. This pressure led employees to create fake accounts for customers.
Other Wells Fargo executives have been fined and charged, but none have been banned from the industry.
Discussion:
Do you think the decision is fair? Why or why not?
This decision represents a shift from the 2008/2009 financial crisis, when banks paid significant fines but very few individuals were charged. What’s your view of the change?
Emails Show USC's Potential Role in the Admissions Scandal
Actress Lori Loughlin and her fashion-designer husband Mossimo Giannulli have been charged with bribing University of Southern California athletic officials to get their daughter admitted. Now emails from USC show that the school was courting them by asking for donations and arranging for personalized campus tours. In one email, a university official wrote, “I’d also be happy to flag her application.”
A New York Times article summarizes how accused parents plan to defend themselves against charges:
Motions by several of the defendants suggest they will argue, essentially, that they could not have defrauded the university, as prosecutors say, because the university was actively seeking such donations and offering a leg-up in admissions in return.
In a statement, USC downplayed the special treatment:
“What was being offered to the Giannullis was neither special nor unique. Tours, classroom visits and meetings are routinely offered. The primary purpose of a flag is to be able to track the outcome of the admission review process. It is not a substitute for otherwise being qualified for admission to USC.”
Parents are expected to say that their donations were legitimate, but USC is expected to say that the bribery was specific to the crew team official, who “agreed to pass the couple’s two daughters off as coxswains.”
Discussion:
What’s your view of this situation? Do you agree more with the parents’ or with the school’s perspective?
What, if anything, do the school’s emails reveal? Consider this message to the parents: “Please let me know if I can be at all helpful in setting up a 1:1 opportunity for her, customized tour of campus for the family, and/or classroom visit?”
WSJ Opinion About Boeing Emails
A Wall Street Journal writer argues that Boeing employee emails “explain nothing.” A previous WSJ article concluded that emails demonstrated a “cavalier attitude towards safety,” and a Reuters article concluded that employees “distrust the 737 MAX” and “mock regulators.”
The opinion writer, Holman Jenkins Jr., argues, “all of corporate America, not just Boeing, lives these days by employing creative, freethinking people who spout off acerbically, critically and colorfully in electronic messages.” Jenkins questions the reporting of these emails and what is omitted.
Jenkins also asks why these employees didn’t write about MCAS design flaws: “If the hypercritical people seen in these messages had known about MCAS’s design flaws, it never would have gotten through.” He also notes that the only emails referring to MCAS were from 2013, although system changes were made in 2016.
Discussion:
Read Jenkins’ article. What do you consider to be his strongest and weakest arguments?
Based on his argument and your own reading of media reports, what’s your opinion about the significance of the emails?
What issues of integrity does this situation raise?
Boeing Internal Documents Don't Reflect Well on Safety
The lead article in today’s The Wall Street Journal is titled, “Internal Boeing Documents Show Cavalier Attitude to Safety.” In 150 pages of emails and other documentation, employees worry that they don’t have enough time to correct safety issues and refer to regulators as “morons” and “stupider.”
In February 2018, one employee wrote, “Would you put your family on a MAX simulator trained aircraft? I wouldn’t.” A pilot wrote, “I still haven’t been forgiven by god for the covering up I did last year. Can’t do it one more time. Pearly gates will be closed.” Still another employee wrote, “This airplane is designed by clowns, who in turn are supervised by monkeys.”
A defense attorney argues that employees were just “blowing off steam” in their emails.
In the past few months, Boeing’s culture has come to light—once lauded as a place where people felt proud to work but now a place where people feel stressed and remorseful. CEO Doug Muilenberg has since been terminated and replaced temporarily by CFO Doug Smith.
Discussion:
Read more about the internal communications. What lessons can employees and their managers take away from this story?
What’s your view of the emails? Do they indicate big problems at the company, or is the attorney right that employees are just venting to each other? How does the concept of “cherry picking” come into play?
What should Boeing do to manage this situation? Consider this news in light of the company’s crisis communication planning you read about in another post.
JPMorgan Recorded Phone Conversation
Jimmy Kennedy, an African-American former National Football League player, tried to open a private wealth account at JPMorgan but had trouble getting attention. He recorded a conversation with an African-American employee, Richardo Peters, who said, “You’re bigger than the average person, period. And you’re also an African-American. We’re in Arizona. I don’t have to tell you about what the demographics are in Arizona. They don’t see people like you a lot.”
In a New York Times article that published the recording, Peters recounted a specific example of discrimination against a Black customer. When he was trying to bring on another new client, who had received a large settlement, his manager said, “You’ve got somebody who’s coming from Section 8, never had a nickel to spend, and now she’s got $400,000, What do you think’s going to happen with that money? It’s gone.” His manager’s position was that the customer would not invest money with the bank.
Other incidents at the bank led to Peters’ termination, and he is suing for racial discrimination. JPMorgan also recently settled a class-action lawsuit for $24 million to Black employees who claimed discrimination: according to a New York Times report, “in some cases by isolating them from colleagues and dumping them in poorer branches.”
A few days later, CEO Jamie Dimon addressed the situation in a memo to employees.
Discussion:
How do you assess this situation at JPMorgan? Read more in the NYT article.
A February Essence article describes and praises JPMorgan’s Advancing Black Pathways program to support the Black community. What’s your view of the effort in light of this news?
How do you assess CEO Jamie Dimon’s response in the memo? We don’t see the entire memo, but CNBC posted quotes.
Data in the Uber's Safety Report
Uber published its first safety report, and the company is lauded for its transparency. A Wall Street Journal article leads with the number of sexual assaults reported during the last two years: 5,981. Of course, any number is too many—no one should be assaulted in an Uber or anywhere else. And sexual assaults are notoriously underreported, so we have no idea how many have actually occurred.
At the same time, a skeptic might want to know the total number of rides in order to put the number of reports in context. The report does provide this information (see the report for footnotes):
The report makes additional attempts to put the numbers in context:
All of that work culminates in the Safety Report that we are sharing with you, the public, today. To put US safety challenges in context:
• In 2018, over 36,000 people lost their lives in car crashes in the United States alone (3)
• Approximately 20,000 people were the victims of homicide in 2017(4)
• Nearly 44% of women in the US have been a victim of sexual violence in their lifetime—which means that more than 52 million women live with that experience every day (5)
Every form of transportation is impacted by these issues. For example, the NYPD received 1,125 complaints of sex offenses in the transit system during the same time period covered by this report.(6,7) In the United States alone, more than 45 rides on Uber happen every second. At that scale, we are not immune to society’s most serious safety challenges, including sexual assault. Yet when collecting data for that portion of our report, we found there was no uniform industry standard for counting and categorizing those types of incidents.
The 84-page report is incredibly detailed and includes external reports for credibility and the number of charges for various types of assaults.
Discussion:
Analyze the report: the audience, communication objectives, organization, writing style, format. What works well, and what could be improved?
Does the context in these examples convince you that the numbers aren’t so bad? Why or why not?
Otherwise, how well does Uber address the safety issues? How do you assess the report credibility? What other questions do you have?
Fabricated Letters to the SEC
The U.S. Securities and Exchange Commission is planning a policy change that, as a Bloomberg article describes, “would shift power from investors to corporate boards” and “limit[s] the power of dissenting shareholders.” Unfortunately, when Chairman Jay Clayton announced the change, he cited several fabricated letters of support to the SEC.
The SEC failed to recognize that many letters followed a similar template and included a random line in the mailing address—“A Coalition of Growth Companies.”
Clayton was impressed that the SEC heard from such a variety of people, such as veterans and retired police officers, but people contacted said they didn’t write the letter or agreed to having their name on a letter without understanding the implications.
The Bloomberg article reports Clayton’s response:
The SEC declined to comment on any irregularities with the letters. In a Tuesday interview, Clayton sidestepped a question about how the agency ensures comment letters are genuine. He did emphasize that the regulator’s potential revamp of shareholder voting rules are proposals, adding that there will be ample time for people on both sides to weigh in before any changes are finalized.
“We welcome input in all ways,” Clayton said in the interview with Bloomberg Television’s David Westin. “On this issue, where there are a lot of different views and a lot of different interests, we encourage people to come in and talk to us, send us their comments.”
Discussion:
How does something like this happen? Who is responsible?
Assess Clayton’s response. How well is he handling the situation? What, if anything, should he do differently?
What leadership character dimensions are illustrated by this situation?
T-Mobile's Full-Page Ad
In signature pink, T-Mobile ran a full-page ad in Sunday’s New York Times. The ad also feels like T-Mobile because we see “From the desk of John Legere,” the charismatic CEO and frequent tweeter with comments such as, “One of our best weapons is the ineptness of the competition. #sorrynotsorry.”
For a persuasive message, the ad is curious and a good example for business communication students to analyze.
Discussion:
Who are the primary and secondary audiences for this ad?
What are T-Mobile’s communication objectives, and how well does this message achieve them?
If you were advising the company, what suggestions would you have for revisions?
SoftBank's Vague WeWork Slides
SoftBank already took a financial hit because of its investment in WeWork. Now, the company is facing criticism about its data analysis and presentation.
A deck SoftBank Group (SBG) used to justify its WeWork investment includes several “hypothetical” and vague slides, like this one.
If you’re having trouble reading the footnote, here it is:
This hypothetical illustration is provided solely for illustrative purposes, reflects the current beliefs of SBG as of the date hereof, and is based on a variety of assumptions and estimates about, among others, future operating results, the value of assets and market conditions at the time of disposition, any related transaction costs and the timing and manner of sale, all of which may differ from the assumptions on which this hypothetical illustration is based. There are numerous factors related to the markets in general or the implementation of any specific operational plan that cannot be fully accounted for with respect to the hypothetical illustration herein. Any targets or estimates are therefore subject to a number of important risks, qualifications, limitations, and exceptions that could materially and adversely affect the hypothetical illustration presented herein. Accordingly, actual results may differ materially from the hypothetical illustration presented herein. For the avoidance of doubt, this illustration does not reflect actual results or metrics from the company.
The slide title is also odd: the illustration isn’t hypothetical, but the profitability is.
Discussion:
How might this chart affect SoftBank’s credibility?
What other examples in the SoftBank deck are problematic?
What leadership character dimensions are illustrated by this situation?
Letter from WeWork Employees
As WeWork plans layoffs, employees are asking for input into what happens to them and their peers. Referring to themselves as WeWorkers Coalition, the employees wrote a letter to the management team.
To the We Company Management Team:
WeWork’s company values encourage us to be “entrepreneurial, inspired, authentic, tenacious, grateful and together.” Today, we are embracing these qualities wholeheartedly as we band together to ensure the well-being of our peers.
We come from many departments across the company: building maintenance, cleaning, community, design, product, engineering and more. We believe that in the upcoming weeks we have the unique opportunity to demonstrate our true values to the world. This is a company that has inspired many of us, challenged us, and has been a formative personal and professional experience for those of us who began our careers here. WeWork has been not just a workplace, but a source of friendships and inspiration along the way.
We also believe our product can have a lasting positive impact on the world. We want to improve workplace happiness for millions of office workers and support small and medium sized businesses in their entrepreneurial efforts. We have been proud to support these goals and dedicate our time and talent to achieve them. This has been our story so far.
Recently, however, we have watched as layers are peeled back one-by-one to reveal a different story. This story is one of deception, exclusion and selfishness playing out at the company’s highest levels. This is a story that reads as a negation of all our core values. But this story is not over.
Thousands of us will be laid off in the upcoming weeks. But we want our time here to have meant something. We don’t want to be defined by the scandals, the corruption, and the greed exhibited by the company’s leadership. We want to leave behind a legacy that represents the true character and intentions of WeWork employees.
In the immediate term, we want those being laid off to be provided fair and reasonable separation terms commensurate with their contributions, including severance pay, continuation of company-paid health insurance and compensation for lost equity. We are not the Adam Neumanns of this world — we are a diverse work force with rents to pay, households to support and children to raise. Neumann departed with a $1.7 billion severance package including a yearly $46 million “consulting fee” (higher than the total compensation of all but nine public C.E.O.s in the United States in 2018). We are not asking for this level of graft. We are asking to be treated with humanity and dignity so we can continue living life while searching to make a living elsewhere. In consideration of recent news, we will also need clarity around the contracts our cleaning staff will be required to sign in order to keep their jobs, which are being outsourced to a third party. Those of us who have visas through WeWork need assistance and adequate time to find a new employer to sponsor our respective visas.
In the medium term, employees need a seat at the table so the company can address a broader range of issues. We’ve seen what can happen when leadership makes decisions while employees have no voice. We will need to see more transparency and more accountability.
We also need the thousands who maintain our buildings and directly service members to receive full benefits and fair pay, rather than earning just above minimum wage.
We need allegations of sexual misconduct and harassment to be taken seriously, acted on immediately and resolved with transparency.
We need diversity and inclusion efforts to materialize into real actions, not just talking points at company meetings.
We need salary transparency so we can surface and address systemic inequalities.
We need an end to forced arbitration contracts, which strip employees of their right to pursue fair legal action against the company.
We need all of this, and more.
In the long term, we want the employees who remain at WeWork, and those who join in the future, to inherit something positive we left behind. We want them to never find themselves in this position again, and for that to happen, they need a voice.
With this letter we are introducing ourselves, the WeWorkers Coalition. We are taking full advantage of our legal right to establish this coalition, and in doing so, we hope to give the future employees of WeWork the voice we never had.
We want to work with you. Please join us in writing a better ending to this chapter of the WeWork story.
By this Thursday at 5:00 p.m. EST, we would like to receive confirmation of your receipt of this letter and an indication of your willingness to meet us.
The WeWorkers Coalition
@weworkersco • info@weworkersco.org • #weworkers-coalition
Discussion:
What principles of business writing do the employees follow?
What persuasive strategies do they use in the letter? Find examples of logical argument, emotional appeal, and credibility.
What do you consider the strongest and weakest arguments?
What leadership character dimensions are illustrated in this situation?
Boeing CEO Responds to Questions
This week, Boeing CEO Dennis Muilenburg answered lawmakers’ questions about the two Max 737 plane crashes in the past year. Facing families of deceased passengers, Muilenburg began his testimony with an apology:
“I’d like to begin by expressing my deepest sympathies to the families and loved ones of those who were lost in the Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents, including those who are here in the room today. I wanted to let you know, on behalf of myself and all of the men and women of Boeing, how deeply sorry I am. As we observe today the solemn anniversary of the loss of Lion Air Flight 610, please know that we carry the memory of these accidents, and of your loved ones, with us every day. They will never be forgotten, and these tragedies will continue to drive us to do everything we can to make our airplanes and our industry safer.”
One of the most tense moments was when Senator Ted Cruz questioned Muilenburg (see video). Muilenburg also faced criticism as he was leaving. The mother of a victim of the second crash responded to his invoking his Iowa farm background:
“Go back to Iowa. Do that.” She also said, “I don't feel like you understand. It's come to the point where you're not the person anymore to solve the situation."
Discussion:
Watch more of Muilenburg’s testimony. What are some examples of questions he addressed well, and how could he have done better?
How well does Muilenburg balance emotional appeals, logical arguments, and credibility in his testimony?
What leadership character dimensions are illustrated by this situation and by Muilenburg’s testimony?
Muilenburg’s interaction with the mother is a difficult situation for anyone to handle, and we can certainly understand her grief and anger. How would you have responded?
CNN reports:
“In response, Muilenburg said he respects her viewpoint. "But I want to tell you the way I was brought up. And I'm just being honest here about it. I learned from my father in Iowa ... when things happen on your watch you have to own them and you have to take responsibility for fixing them," he said.