Archive for November, 2009

EasyJet have pulped 200,000 copies of their inflight magazine rather than risk the ire of travellers after locating a fashion shoot against the backdrop of the Berlin Holocaust museum. I have to say it seems a little strange to even think about doing something like that. It is not as if Easyjet travellers are cutting edge and enjoy sharp irony.

The holocaust is a NO for any type of commercial exploitation even if politicians routinely use it for political purposes. What is interesting is that EasyJet got it straight away and decided the cost to the business reputation was too high to risk.  Sure the story has been covered in the press, but their response showed that they were alert to the sensitivity and sensibility of their passengers.

Celebrities are always one faux pas away from disaster (and loss of those lucrative commercial endorsements). Tiger Woods is compounding his problems by saying nothing about the crash outside his house and the suggestion that the family is stonewalling the police puts a different slant on the incident.

As the most valuable sportsman in the world, Tiger has a lot to lose and it is apparent that his public relations team has no proper crisis management plan in place. The news and leaks from briefings from the police are driving the story agenda and what seemed like a sad domestic incident is becoming a story with real legs.

Silence equates to something to hide in this case and Tiger’s normal reticence won’t wash in this context. His team need to get him in front of the police with a statement (how long does he need to rest for?) and they need to grab a hold of the story as soon as possible and put some positive news out. They certainly need to get the story straight and ensure that Tiger’s wife moves out from the centre of the story to periphery. What started a minor car accident is beginning to look like something much, much worse.

What’s reputation management got to do with a guy who rarely goes out of his house, you may wonder. But, then like all great ideas that go ka-ching ka-ching and rakes in the money, this one is  so simple that you’re going to kick yourself for not having thought about it first.

Drum-rolls for Jason Sadler, a guy who wears T-shirts for a living and has made $85,000 this year doing just that. Jason wears T-shirts for all kinds of people – people like you and me, celebrities who have a new line of products to promote and even companies looking to get the word out about their products. He blogs about it, Tweets about it and even does live video streaming wearing the T-shirt with logos his clients have paid him to wear on YouTube.

Talk about having a light bulb moment and even as you say “why didn’t I think of that” Jason labours on for his clients who can get him to wear a T-shirt for $1 on Jan 1 and $2 for Jan 2 and so on till Dec 31 he gets paid $365. He is so busy that he plans to recruit an assistant in 2010 and expand to Europe and South America and is going to charge $2 for Jan 1 and $4 for Jan 2 and so on in 2010 with the – “two dudes in your shirt” marketing tag as he calls it.

Here’s a guy who will Tweet your grandmother’s birthday wishes wearing a T-shirt or inform the public of new line of products or even get your online reputation given a quick boost like Bill Cosby did with Jason’s help. 

Online reputation management has found for itself a new dude in Jason Sadler and his quirky idea and he works hard for his clients on Twitter, Facebook and Youtube. I give a thumbs up for this great idea.

Reputation is a delicate thing and built into it at some sub-conscious level is a sense of fairness. Most good reputations are built around people or organisations being fair to others.

There is a certain irony in Dubai effectively bouncing a cheque on its creditors when ironically it is illegal to do the same in the emirate itself. Will the directors of the Dubai World get taken to court… I doubt it somehow.

What is coming out in the wash from the backwash of Dubai’s credit problems is the real  state of Dubai’s economy and legal framework. If you are foreign you are low down the pecking order: lowest are the Indians and Asians doing the building work and domestic work who often enjoy very little legal protection against harsh employers.

The world credit markets may be spooked, but this embarrassment may well lead to the rulers of the emirate rethinking how they treat the people living in there.

Apple is always cocky about its products, but the general feeling is it often overlooks the feedback and takes a beating on its reputation. Till Steve Jobs appears on TV to explain that all’s well!

In the News now is Apple’s application approval process, which is giving it a bad name. Users have no idea what is in store once they send an application to Apple for approval. With customers having more options online to publish their woes about the application, Apple seems to be getting entangled in world of bad products.

Nothing damages a company’s reputation like bad press. People in groups get connected on forums and social sites to discuss the issue or otherwise let the company know what their product is all about and the issue gets swollen.

As online reputation managers, what would we suggest?
That Apple needs to get into the damage control mode and ensure its customer that the application works according to customers expectation. Secondly to improve the current process by publishing additional reviews. Finally chalk out clear ways that could positively escalate the issue on social forums, and put across Apple’s view.

Hope Apple realizes that it takes time to recover from a bad reputation. And it’s not good to keep the customers guessing.

Would you do business with the Russians? Well you’ve got to be truly brave or obstinate of the bovine kind to actually consider it. Business fraud in Russia is rampant and has had a 12 % increase from that of 2007.

Russia has had huge trouble dealing with its bad reputation even though the country is now the largest producer of natural gas overtaking even the might of Saudi Arabia. But then that’s the end of the story as far as business diversification goes, being infamous for hackers, the mafia and what not, Russia is in the trenches as far as business reputation goes.

Transparency International has put Russia at 146 out of the 182 countries surveyed – at par with Sierra Leone! Places like Dubai are facing business dishonesty and debt, the slide in reputation has only begun in these places while Russia has a mammoth task ahead!

Meanwhile the world will remain wary of doing business with the Russians and that is how it stays.

In the global financial world, default is the ultimate reputation risk if you rely on those markets for your funding. Dubai, long the poster child for the modernising Gulf states is just the latest Gulf state to stick a finger up at investors after Kuwait’s Global Investment and Investment Dar (both financial firms) defaulted  in January 2009. Certain Saudi merchant families with huge loans outstanding look likely to be next.

The problem with default in these autocratic states is that they still don’t get it and think that they have the right to change the rules for creditors when it suits them. In the short term, there is little that creditors can do except fume and follow the long and usually hopeless path to legal settlement.

Investors can have long memories and there is going to be little appetite for investing in these states in the short to medium term now that financial institutions cannot layoff the debt as they used to. Times have changed.

A few years ago, a bank could fund any half baked project, collect a massive transaction fee and lay off the debt on some poor sucker somewhere else who was left holding the baby.

Well, we already know that banks are velaciraptors and treat their statements with hard won cynicism, but we also know that the Gulf may have oil but they also have legal systems that prefer locals to foreigners and an instinct to change the rules as they see fit.

Default usually reveals something else: either you have no friends or the bargain your “friends” are offering is just too steep. In the case of Dubai, it looks like maybe Qatar and Abu Dhabi have asked for a pound of flesh in return for support. For the playboys royal family in Dubai, maybe that is a pound too much.

RBS may be the bank with the worst reputation in the developed world. Arrogant, hubristic, profligate and, let’s be honest, bankrupt. Whilst the party line has been that they are grateful for government support (ie us the taxpayer) every so often it slips out – their real feelings internally.

Their real feelings, courtesy of CFO Kyle is that they have been unfairly singled out and done nothing wrong. What they actually done is go bankrupt, but unlike most businesses, they have had recourse (secretly) to massive government intervention.  They are now, to all intents and purpose public servants and should accept that fact.

The whole notion that RBS can trade its way out of its situation is both unrealistic and also preposterous. Of course these banks should be broken into pieces and we should be able to start again. Maybe, in future shareholders will think more carefully about a company’s extraordinary. growth plans.

Kyle’s comment have done RBS’s reputation some real damage as he has revealed the true sentiments of senior management.  We knew bankers were arrogant… it’s always nice to have proof.

Poor Lloyds HBOS. They are the banking equivalent of Gordon Brown: whatever they do makes them look like either stupid or dishonest. The latest economies of truth feature the revelation that HBOS had received substantial amounts of state aid before their takeover by Lloyds Bank. Shareholders are asking why they were not told this “material” information at the time of the takeover. Whatever the bank says, shareholders won’t be happy as the transaction must be one of the largest destroyers of shareholder value in business history.

Of course, Lloyds is denying any worngdoing. Is there a course these people go on to teach them how to deny everything.

This comes a week after Lloyds HBOS denied any further relationship with the “best of banker of his generation” Peter Cummings who was seen entering their headquarters last week. If they are not doing anything with him, why was he entering the building?

Banks have stooped to new lows when it comes to thinking through their reputation management. They still don’t get it when it comes to transparency and sentiment.

The problem for LloydsHBOS is that management reputation is entirely destroyed but as ever, management don’t see it that way and continue to plough on. The Armada anyone?

Dubai’s reputation for both business acumen and business honesty continues to dissolve. The request from Dubai World for a standstill on their debt is just latest evidence of the financial whirlwind that the state is reaping after a decade of profligate spending of other people’s money on increasingly hubristic projects. The decision to release the statement after the markets closed for a long holiday won’t do anything to assuage the anger of investors who will see this as another naked attempt to massage the sentiment of the market.

Default swaps on Dubai’s sovereign debt are now higher than Iceland’s which is evidence of the market’s appreciation  of Dubai’s real position. Expect a dignified firesale of national assets like Emirates and Dubai Ports.

Dubai always tried to present itself as the place in the Gulf to do business, but the financial situation and the opacity of the nomenklatura is rapidly destroying Dubai’s reputation for business ethics and honesty.

Unpaid workers strike, contractors are taking principals to court and increasingly Dubai’s business enviroment is being seen as the Vegas of the Gulf. In the end all that glitters is not gold!