A ‘Real’ Use for Blogs…GE, Imagine That!
Okay, I’m a regular contributor to this blog, so it is apparent that I see blogs and other forms of “social media” to be useful–and worth using.
So my ears twitched when Gary Sheffer, executive director of communications and public affairs at General Electric Company, told participants at the 2006 Corporate Reputation Summit that he isn’t convinced that blogs have a place in his company. I was particularly interested in his thoughts because I believe that he spent the majority of his presentation, “Managing Reputation in a Diverse Global Company,” making the case for a GE blog. See if you disagree.
“There is no reputation function at GE,” he said. “Our entire culture is built around demonstrating performance with integrity.” He reiterated a point made by other presenters at the summit: Corporate reputation is important, and “unofficial” non-governmental organizations like environmental groups have more credence among consumers than traditional groups such as large national and global corporations, unions and mainstream media.
He shared an example of GE’s less-than-stellar handling of an incident that became an embarrassment to GE. The short version: A GE employee delivering product in a company van to a residential customer, ran over and killed the customer’s two pet pug dogs. The company quickly expressed regret and offered to settle with the customer. When GE lawyers noticed that the settlement amount was equal to the price of two show-quality pugs, and the deceased animals were apparently of lesser stock, they successfully argued that GE should reduce the settlement amount.
The now insulted and angry customer shared the story with local media; it was posted on the Internet, and eventually became a highly reported item in USA Today. The company eventually paid about 500 times the cost of the original settlement in terms of its damaged reputation, Sheffer estimated.
Switching gears, Sheffer provided the following “must haves” for managing reputation:
- Earn your reputation through transparency and building trust
- Accountability=Reputation. Studies show that the reputation of a company that fixes a problem is actually higher than a company that never has a problem reported.
- Evolve or Die. Calcified rhetoric will kill you
- Pick a team (choose people who can do what you need done)
- Build values…not policies. Communicate clearly who you are as a company, and then let your communicators go.
He said the “best thing for PR is to bring an outside perspective into your company and then use it to make informed decisions.”
Sounds like a case for a blog, or some other form of social media. GE does need to evolve or die, and part of the evolution should be to adopt a strategic approach to introducing ways to increase the company’s transparency, build trust, demonstrate accountability and showcase values. A corporate blog would have allowed the company to contribute to the conversation about the dead pugs–of course, a common-sense settlement early-on may have killed the story all-together.
Here is an example that I have from my postings on this site. Some time ago, when I first mentioned that I work for a wholly-owned subsidiary of Volkswagen of America, a regular commenter asked whether I meant, “Volkswagen, the scandal-plagued German automaker.” Instead of ignoring the comment, or firing back an angry retort, I replied, “I prefer Volkswagen, the best value in a German-engineered motor car.” We have exchanged many comments since then, to the favor of this blog.
GE, which is strongly pushing its social responsibility message (”ecomagination”), could do so much by engaging in conversations with its customers and stakeholders. It still displays the tagline, “Imagination at Work.” I hope that they quickly imagine Web 2.0–because it’s here.
May 4th, 2006 at 4:49 pm
I came across this post about the benefits of blogs thanks to an item on Neville Hobson’s blog. Thanks, Neville.
http://www.scoutblogging.com/2006/04/what_are_the_benefits_of_corpo.html
May 5th, 2006 at 7:54 am
Thanks for the link Tom. I looked all over Neville’s site and could not find the item that led you to the post. Any help?
May 5th, 2006 at 9:20 am
This is good stuff. Thank you and please keep it coming.
May 5th, 2006 at 10:47 am
Stephen, it actually was on the right side of Neville’s blog, under:
“From My del.icio.us“
May 5th, 2006 at 1:14 pm
About the dogs and the lawyers…
That’s a no-brainer. In any organizzartion with a decent PR department, the lawyers would have been to to shut up and go review their briefs, and the settlement would have been made.
If the profsssional organizations representing professional communciators were doing a half decent job, lawyers would not be making PR decisions in a vacuum. Senior executives would respect communciators, and make sure communicators were at the highest levels in the company.
I’m surprised the GE guy would even tell the story. All it says is that he wasn’t at a table he should have been at.
But, you know, I expect no better from General Electric. It’s not all that much more responsibile than it was in Welch’s days.
BAK
May 5th, 2006 at 1:39 pm
Brian,
I hope that someone else who attended Gary Sheffer’s presentation at the Corporate Reputation Summit will weigh in here because I want to defend Gary, but am a little unsure of this detail. I BELIEVE that PR/Corporate Communications WAS involved in the discussion, but the lawyer’s viewpoint won out. Can anyone who attended the session (or Gary himself), clarify this?
May 9th, 2006 at 9:06 am
Tom, it was a pleasure meeting you at the conference. You are correct in your summation of Gary’s story. PR/Corp Communications was at the table - the advice they gave was to pay the customer the amount originally requested. It was GE’s legal dept that researched the dogs’ pedigrees and found that they were pound pugs, and then stood on their heels about what to offer the owner in the way of compensation.
Kevin Frazier
May 9th, 2006 at 12:36 pm
Kevin,
Thanks for clarifying, and for contributing to the Cafe. Come back often! I enjoyed meeting you and our automotive company counterpart from Toyota Financial Services, Karen.
I have so much more that I want to share with Cafe readers, but time is short and other priorities are looming. I’ll probably only write-up a couple more session recaps. Please add your impressions of the summit.
Tom
May 10th, 2006 at 7:41 am
So what was the bottom line?
The lawyers got listened to and the communictors were not respected enough to have their advice followed…the projected was f… up.
And it really is a no brainer.
Just how stupid does someone need to be in order to NOT anticipate the bad result of the lousy legal advice?
How much time has GE spent fighting — making the lawyers rich — BINGO!!! - situations where it ended up doing what a half-decent PR person would have recommended in the first place? Everything from Welch’s obscene payouts to the Hudson River cleanup.
I just shake my head sometimes…
BAK
July 15th, 2006 at 2:46 pm
To Mr. Keefe and other interested parties,
Your story about GE and how costly it was to their reputation did not teach them anything. If GE continues to dismiss and ignore the power of blogging, the internet, and angry consumers they will continue to suffer damage to their reputation and take financial hits never imagined. A new culture (and weapon) is developing in this country that big corporations had better pay attention to. The last of the free press - the internet- is a vehicle by which consumers communicate, organize, and strike back. Visit our website and see what has been accomplished by utilizing the media and the internet. My story is similar to the customer who lost their dogs and GE refused to do the honorable and smart thing. It all started because GE would not replace my refrigerator, and now… hundreds of millions of dollars later…..www.BringGoodThingsToLife.org