Goldman's Image Makeover

In the fight for programmers, Goldman Sachs is up against Silicon Valley, known "as the promised land of flip-flops, beanbag chairs, and million-dollar stock options." Potential recruits think of Wall Street firms as stodgy, and they worry they're be stuck in a back office, away from where the real business happens. In part, Goldman is selling its variety of work and clients compared to Silicon Valley, where a Goldman managing director said students might work with only one application.

Goldman is using technology to create a hipper image. A new website shows the role of technology in the company, a Google Hangout connected computer scientists and Goldman recruiters, and short videos were created on these topics:

• Builders and Innovators Summit
• Careers
• Stories of Progress
• Employee Affinity Groups
• Citizenship
• Talks@GS
• Outlook
• Our Thinking
• 25 Ways We Saw the World Change in 2013

In the end, according to the New York Times Dealbook article, recruits may be lured by Goldman's "generous compensation" packages.

Discussion Starters:

• What's your perception of technology positions on Wall Street compared to Silicon Valley?
• What is Goldman's best strategy for encouraging applications? Should it focus on image, compensation, or some combination? What would change your thinking about the company?

Ads Encourage Risky and Unhealthy Behavior

A new study showed that people who read promotions about diet aids ate more.

To be published in The Journal of Public Policy and Marketing, the study exposed people to two versions of messages. Both groups read a warning about high-fat diets, but one group read this additional text: "Until now! Introducing Chitosan Rx Ultra," a weight-loss aid "capable of absorbing up to 60 percent of the fat in your food." When given a plate of cookies, people who saw the message about Chitosan took significantly more cookies, and some took all 30.

The study authors conclude, "Why make healthier food choices to manage weight if a weight-management drug can manage your weight for you?" In a related study, participants exposed to ads for debt consolidation made riskier financial decisions.

Calling something a "supplement" didn't have as drastic results as calling something a "drug." One of the authors explains the distinction: "With the supplement, the very name reminds you that this is supplemental to other health protective behavior. They think [losing weight] is something they have to do as well … but people believe that the drug alone will take care of the problem."

Image source.

Discussion Starters:

• What, if any, responsibility do diet drug companies have in advertising?
• The Bureau of Consumer Protection published a website to help people spot false claims of weight loss products. How useful do you find the site?

Spirit Airlines Offers Miles for Hate

Here's a new marketing strategy: Ask customers why they hate you and reward them for it. Spirit Airlines encouraged responses in exchange for 8,000 frequent flier miles: hate for eight, or H8. The company received more than 30,000 comments.

In a press release, the company promotes its "State of Hate Report." According to Spirit's President and CEO Ben Baldanza, "I think if any organization asks for feedback you would expect the vast majority of responses would be directed at the company that seeks it. But in this case we were surprised that most consumers chose to share their frustrations about other airlines." In an infographic, Spirit explains the campaign and the results. One of the graphics shows the distribution of hate.

On another video, a cartoon character news reporter reviews the survey results and encourages more responses.

Discussion Starters:

• Describe the company's strategy for the campaign. What do you think Spirit's management team hoped to accomplish?
• Would you consider the campaign successful?
• What's your view of the two videos and the infographic? Consider Spirit's audience and the company's messages.

Virgin's Response to the SpaceShip Two Crash

Virgin Group has been defending the Galactic brand since the SpaceShipTwo crashed, killing the colot and injuring the pilot. Communications have been steady and varied from Virgin founder Richard Branson and Galatic CEO George T. Whitesides. 

In a series of statements on its website, Virgin Galactic explained information as it was understood. Whitesides also held a press conference. 

On its website, Virgin (the parent company) acknowledged the tragedy and described how the company was learning from the incident:

This is a very tough time for all of us at Virgin Galactic, The Spaceship Company and Scaled Composites, and our thoughts remain with the families of the brave Scaled pilots, and all those affected by this tragedy. We are determined to find out what went wrong and are working with the authorities to get that information. It is too early for me to add any details of the investigation at this stage. Read more.

In videos and interviews, Richard Branson expressed his continued confidence in the space program.

Discussion Starters: 

• What are the main messages you take from Virgin's communications? 
• Assess each message, including the company's webpage dedicated to the incident. Compare how the page includes text and graphics with the text-only statements. 

UNC Communications About the Scandal

University of North Carolina Chancellor Carol L. Folt is on the hot seat to respond to a highly publicized scandal that the Washington Post says involved "an alarming lack of institutional oversight."  Between 1993 and 2011, more than 3,100 students, many of whom are athletes, were given inflated grades and credit in bogus courses.

In a 136-page report, former U.S. Justice Department official Kenneth Wainstein describes "paper classes" for students and the involvement of many university officials. The university now faces accreditation questions and an investigation by the NCAA.

Chancellor Folt wrote a statement, trying to separate the university from its past and calling on its 221-year history.

Discussion Starters:

• Read the report. What principles discussed in Chapter 10 of the textbook does the report follow? Which are not followed? Overall, how do you find reading the report? What are the strengths and weaknesses in content, writing style, organization, formatting, and so on?
• Read Chancellor Folt's statement. What is her strategy for managing the crisis situation? How successful is her message in improving the university's image?

How Not to Respond to a Negative Review

Taking a page from Amy's Baking Company, a Cleveland restaurant owner attacked a reviewer. The guest posted a detailed, negative review on Yelp.

Ninja Kitchen and Bar Chef Bac Nguyen didn't appreciate the comments. He found the guest's phone number and texted him. In a series of insulting messages, Bac Nguyen threatened him, disparaged his friend, insulted him, and called him names. Read the texts (NSFW).

Business owners are under tremendous pressure to deal with negative reviews. When a review is deemed reasonable, like this one, we expect the chef of a restaurant to issue a gracious response-perhaps a lot to ask of someone so invested in the food.

Discussion Starters:

• Compare this chef's response to that of Voltaire's owner. What differences and similarities do you see in the initial reviews and the responses?
• Draft a Yelp response for Chef Bac Nguyen. Consider something that would be intentionally public.
• What other advice would you give Chef Bac Nguyen about customer service and business communication?

Restaurant Owner Disputes Yelp Review

The owner of Voltaire, a Kansas City restaurant, didn't accept a critical Yelp Review. The reviewer and her lawyer-husband were busy in a meeting across the street, and Voltaire refused to package the food "to-go" for someone to pick up.

On Yelp, the reviewer gave Voltaire one star and explained the restaurant's refusal, beginning with the line, "Most unfriendly and arrogant restaurant in KC." In the owner's response, he confirmed that they don't offer take-out:

"I sincerely apologize that we don't offer "take-out" food at our restaurant. Being a Yelp user, I'm sure you were aware that on our Yelp business page, on the right side of the screen, it lists details about our establishment. There is an item listed "Take-Out : No." We have never offered take-out food as we believe the food we prepare should be presented as we see fit, (usually) on a plate inside the dining room."

The owner went on to draw an analogy between not offering take-out and not providing divorce assistance when one is a tax lawyer.

Although Voltaire reviews on Yelp are generally positive (4 out of 5 stars), a few comments may indicate other issues, such as this 2-star review:

"I'm mixed on Voltaire.

'The good: the food and drinks are incredible. Good enough to earn them back a star after a really unfortunate experience.

"The bad: the staff knows the food and drinks are good, but behave like that grants them a licence for difficult behavior. . . ."

Discussion Starters:

• Read the entire original review and the owner's response. Based on this exchange, did the owner handle the situation well?
• Even if you agree with the approach, what, if any, missteps did the restaurant make with this customer?
• Is the lawyer analogy effective? What makes an analogy false?
• What about the adage, "The customer's always right?" Has social media changed this?
• What's the customers' responsibility? How, if at all, did they act inappropriately?

Uber Promotes Rides from "Hot Chicks"

As the ride-sharing service Uber tries to make inroads into France, BuzzFeed criticized one of its promotions. Through an app called "Avions de Chasse," Uber promised a free, 20-minute ride with a model. The promotion is explained on the Avions de Chasse website:

"Avions de chasse" is the French term for "fighter jets," but also the colloquial term to designate an incredibly hot chick. Lucky you! the world's most beautiful "Avions" are waiting for you on this app. Seat back, relax and let them take you on cloud 9!

The website also shows provocative photos of women. 

Uber Lyon has withdrawn the promotion and announced the decision on Twitter.

The company also sent a statement to Huffington Post:

"We have decided to cancel the operation immediately, not having clearly assessed the situation, we sincerely apologize to the people who might have been offended."

Discussion Starters:

• Assess Uber's apology. What works well, and what could be improved?
• One website accusses BuzzFeed of "harassing" Uber about the campaign. First, what is "harassment," and is this an appropriate term in this situation? Second, what's your view: Is it appropriate to criticize the campaign or not?

Toys R Us Pulls "Breaking Bad" Figures

Facing too much criticism to ignore, Toys R Us has taken its "Breaking Bad" action figures off the shelves and off line. The figures reflect characters in the AMC show about a chemistry teacher turned meth maker.

A change.org petition questions whether the figures are appropriate for children: "...their decision to sell a Breaking Bad doll, complete with a detachable sack of cash and a bag of meth, alongside children's toys is a dangerous deviation from their family friendly values."

Social media comments indicate similar concerns, for example, "My childhood purchases consisted of furbies and barbies. But kids nowadays get to buy Breaking Bad action figures with fake meth."

At first, Toys R Us defended the dolls by claiming that the packaging, "clearly notes that the items are intended for ages 15 and up" and that they're only sold "in the adult action figure area of our stores." But Toys R Us changed its position. In a later statement, the company said, "Let's just say, the action figures have taken an 'indefinite sabbatical.'" This is a show joke, meaning they're dead.

For its part, Toymaker Mezko Toyz has said nothing.

Discussion Starters:

• Should Toys R Us have predicted the controversy and not released the figures?
• Did the company do the right thing by pulling the figures?
• What, if anything, should Mezko Toyz do now?

Dallas Hospital Explains Mishandling of Ebola

The Dallas hospital that misdiagnosed a case of Ebola has apologized and is trying to understand its own mistakes. The Texas Health Presbyterian Hospital's chief clinic officer wrote a statement explaining what happened to the U.S. House Energy and Commerce Committee's Subcommittee on Oversight and Investigations:

"Unfortunately, in our initial treatment of Mr. Duncan, despite our best intentions and a highly skilled medical team, we made mistakes. We did not correctly diagnose his symptoms as those of Ebola. We are deeply sorry."

Later in the statement, the hospital explains the nurse's situation:

"Also, in our effort to communicate to the public quickly and transparently, we inadvertently provided some information that was inaccurate and had to be corrected. No doubt that was unsettling to a community that was already concerned and confused, and we have learned from that experience as well.

"Last weekend, nurse Nina Pham, a member of our hospital family who courageously cared for Mr. Duncan, was also diagnosed with Ebola. Our team is doing everything possible to help her win the fight, and on Tuesday her condition was upgraded to "good," so we are all very hopeful. I can tell you that the prayers of the entire Texas Health system are with her. Yesterday, we identified a second caregiver with EVD. I can also tell you that our thoughts and prayers are with her and her family as well.

"A lot is being said about what may or may not have occurred to cause Ms. Pham to contract Ebola. She is known as an extremely skilled nurse, and she was using full protective measures under the CDC protocols, so we don't yet know precisely how or when she was infected. But it's clear there was an exposure somewhere, sometime. We are poring over records and observations, and doing all we can to find the answers."

The rest of the statement includes a timeline of events and lessons learned.

To help with its communications and improve its image, the hospital has hired PR firm Burson-Marstellar. A pointed Reuters report criticizes executive compensation and quality failures in the system. Although Burson is encouraging more openness from the hospital staff, the Reuters reporter calls for a closer look at the business. 

Image source.

Discussion Starters:

• If you were consulting with the Texas Health Presbyterian Hospital, what advice would you give them? Consider communication strategies and other business practices.
• Analyze the organization, content, and tone of the hospital's statement. What business writing principles does the statement follow and skip?
• Read the Reuters article. Which arguments are most compelling?
  

McDonald's "Our Food, Your Questions" Campaign

McDonald's is trying a more direct approach to addressing concerns about its food. In a new campaign, "Our Food, Your Questions," the company promises to respond to consumers' questions.

Some say it does so too willingly. A Huffington Post article, "Only McDonald's Would Advertise That Its Food Rots," questions the strategy. In a video featuring former "MythBusters" host Grant Imahara, we see a hamburger decomposing-not the most attractive sight. Apparently, this busts the myth that McDonald's food is indestructible.

Another video starts with the questions, "Are there lips and eyeballs in there?" and "At what point do we inject the pink slime?" Such a direct approach may raise more questions than it answers.

A TIME article also criticizes McDonald's. According to the writer, the company's campaign misses obvious questions about antibiotics and whether eggs are from cage-free chickens:

"If McDonald's really wants to connect with consumers, it should take a hard look at the practices behind the ingredients it uses and begin to change them incrementally. It could take a real stand for sustainability-including changing to suppliers and producers who raise meat without antibiotics. As the biggest fast food company in the nation, McDonald's choices are no small potatoes. A change like that could mean a much happier meal."

Discussion Starters:

• What's your view of the new campaign? On balance, will McDonald's get the results it wants?
• McDonald's denies that this campaign is related to its poor performance. August showed the worst sales results in more than ten years. What do you think?

Microsoft CEO Regrets Comment About Women and Raises

Don't worry about pay, women, trust that the system will work. That was Microsoft CEO Satya Nadella's suggestion during an interview at the Grace Hopper Celebration of Women in Computing on Thursday:

"It's not really about asking for the raise but knowing and having faith that the system will actually give you the right raises as you go along. And that, I think, might be one of the additional superpowers that quite frankly women who don't ask for a raise have, because that's good karma. It'll come back because somebody's going to know that's the kind of person that I want to trust, that's the kind of person that I want to really want to give more responsibility to. And in the long term efficiency, things catch up."

In addition to backlash on social media sites, Nadella's comment caught heat from a New York Times reporter who appropriately reminded us of the research:

"Women are paid less than men, and one reason is that women are less likely to negotiate for raises or promotions. They feel more anxiety about negotiating and are less likely to consider job situations to be negotiable, according to Linda Babcock, an economics professor at Carnegie Mellon University and a leading researcher on women and pay negotiations."

In an email to employees and in a tweet, Nadella said he regretted his comment.

From: Satya Nadella
Sent: Thursday, October 9, 2014 5:24 PM
To: Microsoft - All Employees (QBDG); Retail: All FTE
Subject: RE: Empowering Others

All - Today I was interviewed on stage by Maria Klawe at the Grace Hopper Conference - I encourage you to watch the video. It was great to spend time with so many women passionate about technology. I was honored to be a part of it and I left the conference energized and inspired.

Toward the end of the interview, Maria asked me what advice I would offer women who are not comfortable asking for pay raises. I answered that question completely wrong. Without a doubt I wholeheartedly support programs at Microsoft and in the industry that bring more women into technology and close the pay gap. I believe men and women should get equal pay for equal work. And when it comes to career advice on getting a raise when you think it's deserved, Maria's advice was the right advice. If you think you deserve a raise, you should just ask.

I said I was looking forward to the Grace Hopper Conference to learn, and I certainly learned a valuable lesson. I look forward to speaking with you at our monthly Q&A next week and am happy to answer any question you have.

Satya

Update: Nadella apologizes again in an email.

Discussion Starters:

• Assess Nadella's original comment during the interview. Do you agree with him?
• Now assess his apology. In what ways does this change your thinking about his comment?

Zappos Does Damage Control About Layoffs

According to Zappos CEO Tony Hsieh, the company's plans to lay off 30 employees started an "avalanche" of false reports. Part of the backlash comes from concern about Hsieh's promise to invest in Las Vegas. In 2012, he started the Downtown Project and poured $350 million into real estate and 300 start-ups that, today, employ about 800 people. 

The perception isn't helped by an open resignation letter written by David Gould. Gould left a teaching job at the University of Iowa to join the Downtown Project. This is excerpt from the letter:

"Tomorrow, many of the people who merged their voices with yours will find themselves without a job. While their names have yet to be revealed, the disillusioned expressions I conjure up are keeping me awake tonight. This group will undoubtedly include numerous young adults, who have not yet found your good fortune. As they have naively purchased homes and started families, this decision will impact them greatly."

In response to the letter and other criticism, Hsieh puts the layoffs in perspective: 

"We eliminated 30 positions from our corporate support staff. We directly employ more than 300 people, and through our investments there are over800 people working in our porfolio of companies in downtown Vegas. Later this week we are adding about 30 positions when we open up The Market and we plan to continue to grow our total job count."

A 2008 ZDNet article compliments Zappo's transparency when it laid off 8% of its workforce six years ago. 

Discussion Starters: 

• Read Hsieh's entire response. Which arguments do you find most and least persuasive? 
• Read the 2008 ZDNet article. What has changed in social media in the past six years? 
• Zappos usually wins points for its corporate culture. How, if at all, do you think that reputation factors into the media coverage?

Michael Phelps Apologizes, Again

Michael Phelps now has two DUIs-in addition to the bong-hit-to mar his record. The Olympic swimmer was arrested in Baltimore after going 84 in a 45-mph zone and crossing double highway lines.

The previous DUI was in 2004, and the pot-smoking incident was in 2009. In 2012, Phelps told CNN, "I'll make a million mistakes in my life, but as long as I never make the same mistake again, then I've been able to learn and grow."

Discussion Starters: 

• Did Phelps do the right thing by apologizing on Twitter? What are his other options?
• Does Phelps' apology meet the criteria recommended by The New York Times writer: painful, authentic, probe deep, encourage feedback, and elicit real change in behavior.

Starboard Letter to Yahoo

Having finished lambasting Olive Garden, Starboard is onto Yahoo. A managing member of the hedge fund wrote a letter to Yahoo CEO Marissa Mayer with this stated purpose: "to highlight several opportunities to unlock tremendous value for the benefit of all Yahoo shareholders." He summarizes the opportunities as follows:

1. Unlocking the substantial value from Yahoo's non-core minority equity stakes in Alibaba Group Holding Limited ("Alibaba") and Yahoo Japan in a structure that delivers value directly to Yahoo shareholders in a tax-efficient manner;
2. Realizing substantial cost efficiencies by reducing expenses throughout the Company, specifically with a goal of reducing losses in the Display business by between $250 and $500 million;
3. Halting Yahoo's aggressive acquisition strategy which has resulted in $1.3 billion of capital spent since Q2 2012 while consolidated revenues have remained stagnant and EBITDA has materially decreased; and
4. Exploring a strategic combination with AOL, Inc. – a company we know well – which could improve Yahoo's competitive position, deliver cost synergies of up to $1 billion, and potentially facilitate the realization of value from Yahoo's non-core equity stakes with minimal tax leakage.

The recommendation to partner with AOL is perhaps the most dramatic. Mayer responded in a statement:

"Going forward, we have great confidence in the strength of our business. The management team and the board of directors remain committed to building value for all shareholders through the continued execution of our strategy, investing in products that will drive sustainable growth: search, communications, digital magazines and video.

"We will continue to focus on evaluating various capital allocation initiatives, an update to which we plan to provide on our third-quarter earnings call."

Discussion Starters:

• Read the letter for tone. It's a jargon- and cliche-filled masterpiece, but is it appropriate for the context and audience?
• Read the letter for content. What are the most and least persuasive arguments? How does Starboard position itself? 

Ferguson Police Chief's Video Apology

It's a little late, but Chief of Police Thomas Jackson apologized to the family of Michael Brown, the teenager who was shot on August 9, 2014. Wearing casual clothes rather than a police uniform, Jackson spoke to the camera to deliver his message.  

Jackson explained, "The reason we did a taped statement was because there was a lot that I wanted to say, and I wanted to make sure that it was clear. It's harder to do these things out in public." In the message, Jackson acknowledged public mistrust, which some say is irreparable.

Critics on Twitter and Rev. Al Sharpton weren't impressed.

Rev. Sharpton said the response was "too little, too late."

About the delay, Jackson said that he had been wanting to speak with Brown's parents directly for some time. And about his choice of clothes, Jackson said, "It's just me."

Discussion Starters:

• Consider Jackson's options for an apology. Consider the audience, objectives, timing, medium choice, and so on.
• What's your view of the apology video? How do you think the family responded?

Is Yelp Manipulating Reviews?

Davide Cerrentini is proud of his restaurant's rank as the worst on Yelp. Botto Bistro has a slew of negative reviews, most inspired by Cerrentini.

The reviews are quite amusing:

Cerrentini opposes what he considers aggressive ad sales tactics. He claims that Yelp deletes positive reviews and elevates negative reviews if businesses don't sign on for ads.

But Yelp won a recent appeal and posted this statement:

Ninth Circuit Confirms That Yelp Does Not Extort

Posted by Aaron S., Senior Director of Litigation

For years, fringe commentators have accused Yelp of altering business ratings for money.  Yelp has never done this and individuals making such claims are either misinformed, or more typically, have an axe to grind––whether businesses upset that Yelp will not remove reviews they don't like, or unscrupulous internet marketing "experts" trying to make a buck off of honest business owners with dubious reputation management schemes. [Continue]

Discussion Starters:

• How would you describe the tone of Yelp's statement? Is this appropriate?
• Cerretini says he's attracting new, higher paying, loyal customers. Is it still true that "any publicity is good publicity"?

Bad Timing for Headless Halloween Displays

What's fun one year isn't fun the next. Severed heads have been part of many Halloween decorations, but recent beheadings by the terrorist group ISIS make these displays seem insensitive. Several Westerners have been murdered by ISIS, which has distributed graphic videos.

Fox was the first organization to apologize for joking about a severed head. Two weeks ago, to promote the DVD series "Sleepy Hollow," 20th Century Fox created e-cards and encouraged journalists to promote "Headless Day." 

As Fox says in its apology, the timing was unfortunate:

We apologize for the unfortunate timing of our Sleepy Hollow Headless Day announcement. The tragic news of Steven Sotloff's death hit the web as the email was being sent.

Our deepest sympathies are with him and his family, and we don't take the news lightly.

Had we have known this information prior, we would have never released the alert and realize it's in poor taste.

Please accept our sincerest apologies.

Busch Gardens also has an excuse: It's Halloween. Still, the severed head props aren't being received well. The company issued this statement:

The props in this year's event were designed and purchased several months ago. In light of recent events, some of these props have the unintended consequence of appearing insensitive and are being removed. Busch Gardens apologizes for any offense they may have caused.

Discussion Starters:

• Should organizations refrain from headless displays for Halloween, or are people just too sensitive?
• Assess both apologies. What differences and similarities do you notice? 

Urban Outfitters Offends Again

What could be wrong with selling a blood-splatter-patterned sweatshirt? Urban Outfitters has apologized for putting up for a sale a "vintage" shirt with the Kent State logo. If you missed the history lesson, four students were shot in 1970 at Kent State during a political protest.

Urban Outfitters issued this apology:

"Urban Outfitters sincerely apologizes for any offense our Vintage Kent State Sweatshirt may have caused. It was never our intention to allude to the tragic events that took place at Kent State in 1970 and we are extremely saddened that this item was perceived as such. The one-of-a-kind item was purchased as part of our sun-faded vintage collection. There is no blood on this shirt nor has this item been altered in any way. The red stains are discoloration from the original shade of the shirt and the holes are from natural wear and fray. Again, we deeply regret that this item was perceived negatively and we have removed it immediately from our website to avoid further upset."

Kent State weighed into the controversy as well:

This isn't the first time Urban Outfitters introduced an offensive product. The Week chronicled 12 more. 

Discussion Starters:

• Is Urban Outfitters intentionally offending? What are the advantages and disadvantages of this advertising strategy?
  
• Assess the company's response. Does it meet criteria for an effective apology?
• Discuss Kent State's response. Do you think it was wise for the university to weigh in? Why would administrators issue a statement, and what could be the consequences?

DiGiorno Apologizes for Misused Hashtag

DiGiorno's Twitter manager posted too quickly and apologized profusely. Like many Twitter users, the manager didn't check the meaning behind a hashtag and used it to promote the frozen pizza. #WhyIStayed and #WhyILeft were trending about domestic violence-a topic related to the Ray Rice incident.

After a predictable onslaught of criticism, DiGiorno's rep did an admiral job of apologizing. The rep sent individual, customized emails to critics.

The response strategy is a great contrast to Progressive Insurance's approach a couple of years ago. In that situation, the company repeated tweets, inspiring the "robo-tweet" criticism.

Discussion Starters:

• Find other examples of misused hashtags. (You'll see plenty of them.) In each case, what was the failing, and how well did the company recover?
• Evaluate each DiGiorno tweet. Why were these considered successful by AdAge and others?