Uber & Beat, two different cases, one same pattern

Uber & Beat, two different crisis’ response cases, one same pattern: they both don’t have in place a public affairs program to manage sever issues and a permanent corporate communication platform. Sad, although modern business models and young companies. Uber is hiding on stakeholder accussations wherever it launches. Beat ‘bullied’ by the Greek government, possibly didn’t own the competence. But what’s at stake, if your company strategic direction isn’t your main public theme?

Uber & Beat, two different cases, one same pattern

Uber & Beat, two different crisis’ response cases, one same pattern: they both don’t have in place a public affairs program to manage sever issues and a permanent corporate communication platform. Sad, although modern business models and young companies. Uber is hiding on stakeholder accusations wherever it launches. Beat which was ‘bullied’ by the Greek government in 2017 and communicated in a reactive mode, possibly didn’t own the competence.

But what’s at stake, if your company direction isn’t your main public theme? The issue at hand is of great interest to me, having tried for years to educate and instruct companies and leaders on the importance of this type of work; forging a strong relationship with various publics, conveying clear what do you stand for and what is your company’s strategic direction.

Before you node that this is what Communicators say, let’s be clear. Corporate communications isn’t a ‘nice to have’ operation in your Company. It is the only external outreach that builds transparency, ethical stance, trust, and a mission for the social good. Without it, in place 24/7, I don’t believe that easily in the company’s culture, ethics, and operations as they are being claimed and advertised.

Back to basics: Corporate communication

Effective corporate communications are essential to convey the purpose of a business. It is a journey of intelligent two-way dialogue, to influence behaviour, drive productivity and attract, inform and engage multiple audiences. You have to communicate the Purpose. The objective. The goal. The end-game, from the start. But more than that, you have to evangelize it. Preach it. Inspire employees to achieve it.

Uber globally and Beat (a Greek startup now connected with DT Group) are two disruptive solutions in the transport industry. For different reasons, they have failed to own a proactive external outreach Communication plan about their purpose in a sustained, consistent, repetitive way. In tech terms, I would say they neglected to have an omnichannel plan to communicate their Purpose.

Back to basics-II: without a plan, you don’t win

Any communication plan is your route to the final purpose; the usual “how” and the “what.” Now, here’s one tip: if you have effectively communicated the Purpose, it is ok to change the plan, if something critical happens. Then, your employees will follow. End-users will become advocates. Your redirection will be successful. You will still reach the end game. Achieve the objective. Win.

Uber was portraying to be a ‘hype’, the modern, global, arrogant (American) solution. Lots of US-media interviews and native ads, interviews and CEO succession stories – funding, investors and so many intriguing stories around the brand. But it was failing for three years, reading through media, to answer accusations and issues for its model. Drivers? Safety? Contracts? Taxation? Operational model in the country X? No answer at all!

If your only definition is “I’m a modern solution, I’m global and new, follow me” then you only create the conditions for Apathy, Disengagement, and Distrust. I can bet that the fast-track, speedy, New Yorkers are in love with Uber. But the rest of the world?

After 30 years of top-projects I’ve handled and many crises, I can tell you loud and clear: Trust was, is, and will be the currency of the future. It affects brand perception, solutions, and propositions, marketing, sales, online presence and all stakeholder relations.

When you don’t own the competence

Beat (former Taxibeat) is a Greek startup, now already a more mature and experienced company, which has made us all proud in my country. They’ve launched low-key (no major media fuss and ‘big-bang’); they’ve concentrated on their development (app, UI, expansion to new countries etc). It proved recently that they didn’t have in place the corporate communication and public affairs.

They were caught by surprise, being accused (no real grounds here…) by the Greek government and only then, they reacted and started being visible in social and offline media. It’s like having a military force, that moves only after the enemy’s attack. So you have to defend your area in the ‘war field’, but you also need to “hold that bridge”; “take that hill.” Beat with a solid management, a humble and hard-working CEO and in expansion mode, let’s say, didn’t have inclusive corporate communications strategy:

Non-visible Leadership (in isolation?)
Low “Truth-Telling” and Brand advocacy by its employees (visible in public, online spaces?)
Low Public Affairs activity and issues management proactively (to all stakeholders before something …happens)
External communication with customers, IT vendors, distributors, investors, government agencies, etc. (publicized letters, policy papers, online).

Ethical stance, part of brand culture

Uber seems to me (by its public communications tone of voice and tactics) as a ‘pirate’; possibly translating the American business speed and attitude into careless engagement with national state laws. It was accused of not paying taxes, avoiding to setup affiliate offices and be part of the local economies. That said, in large explains why the company has been kicked-out from UK, Germany, Russia.

Beat, on the other hand, follows a more reliable and ethically responsible business approach, conforming to local legislation and acting as a responsible company. But it strongly talked about this in public, only when it found itself under pressure from the Greek leftist government when the latter tried to impose barriers to the company in favour of the taxi (old-cabs) regulated monopoly.

The role of government and regulation in Uber and Beat examples

Governments (UK, Russia, India, Greece and others) are all hostile to new business model. Period! They are also unaware and uninterested to form 21-century regulations that incorporate new context, issues, and modern aspects of governance.

No matter if we talk of Uber, or Beat or any other startup, the role of government is to facilitate society’s pass over to the next (Economy 4.0) age. There are real needs to govern and legislate for data privacy, personalized experiences, security, e-taxation, peer-to-peer economic transactions, e-payments, that government old-logic officials are unaware of, so policies can’t be flexibly adjusted.

Public affairs messaging was used after issues ignited

When both companies were found in the middle of a crisis incident, Uber in London and Beat in Greece, only then they activated their public affairs agenda and argumentation. It was only then that they engaged towards media (loud and clear) and tried to ignite goodwill or tolerance sentiments.

But this is a failure practice under crisis. If a company misses on creating -well before- support and advocacy (through practices, donations, thematic umbrellas, proper information, and statements), in the period of the crisis there’s only reactive messaging defending your positions, but not building so much credibility.

Both companies, for different reasons, went into the “crisis phase” with messaging that wasn’t possible to mitigate positive or negative stances. When media flow your story (even positive reportages), it’s too late to act. Beat was more dynamic, loud-voiced, credible pushing the argumentation it should have spread months ago.

It is the same thing that happens in all crises and to all company leaders: they don’t ever believe, it will ever happen to them! “We have more serious issues to attend to now, leave that for later…”

If You don’t shape your story, someone else will

My golden rule of public relations is that “if you don’t shape your story someone else will.” We see this in politics, sports, allegations, energy, banking, retail complains all the time.

Stimuli to discuss and share

Target breach

In late 2013, an IT security blogger broke a huge story: Target’s IT systems had been hacked, exposing the personal data of up to 110 million customers. Target issued a statement the following day and posted a video with more details on its website. The company apologized, explained how the hack had happened and offered free credit monitoring for affected customers.

Unfortunately, it responded before officials were fully aware of the scope and cause of the problem. This forced Target to later walk back some of its statements, such as the number of customers whose information was hacked. In the eyes of the consumer, it made Target seem unprepared, unprofessional, and even a bit suspicious. Second, Target posted the message from its CEO to its website and then later realized it wasn’t garnering many views. That was because most consumers were taking to social media—not to the website—to air complaints and interact with the company. Do you spread your messages in the right channels?

(source: In case of crisis)

Volkswagen

In September 2015, the Environmental Protection Agency accused Volkswagen of manipulating its engine controls to be able to pass laboratory emissions tests. Not only was the company violating the Clean Air Act by selling vehicles that didn’t meet environmental requirements, but it was also violating its customers’ trust by making its cars seem more environmentally friendly.

Unfortunately, the way the company handled the scandal made things even worse. As the story continued to evolve, the company’s response was seen as inconsistent and, at times, contradictory to previous statements. Executives claimed they didn’t know about the cheating, only to reveal they did just a few days later. Meanwhile, the company’s PR and social media teams struggled to keep up. As the company set out to recall millions of vehicles, consumers reported that the company seemed to be handling the crisis in a dishonest way by not fully “owning” its role in the scandal.

(source: NY times, and global media)

Southwest Airlines

Right in the middle of the busy 2016 summer travel season, Southwest Airlines was suddenly struck by a wide-reaching technology failure. Its website and other key systems were down for more than 12 hours, prompting the airline to cancel thousands of flights. Over the course of four days, the company worked to respond to customer complaints quickly and effectively, in large part by leveraging social media. Its approach offers some key lessons.

Southwest did several things right in its social media response: it apologized profusely for the inconvenience, admitted fault, and continually posted updates as the crisis unfolded (even made use of photos and videos posted to Facebook and Twitter to personalize the response). Unfortunately, the onslaught of customer-service requests and complaints seemed to overwhelm the company’s social media team.

Not long after the IT outage began, complaints on Twitter began going unanswered for hours—and, in the case of Facebook, days. Ideally, the company would have answered each customer in a more timely manner. Southwest failed to post an apology or acknowledgment of the situation in time.

(source: USA Today)

Airbnb 2011

The case occurred in 2011. Airbnb raised millions in funding and started growing. Just two years since launching, it had listings in 13,000 cities, in 181 countries. And then came the blog post by one renter, whose apartment had reportedly been badly vandalized and ransacked by an Airbnb guest. The story spread as fast as those about Airbnb’s success. It went viral from outlets such as TechCrunch and The Washington Post. But Airbnb’s response to the incident serves as a valuable lesson for startups on how to react to public setbacks, beyond just good PR.

As soon as the initial news hit, the blogosphere piled on, churning out story after story describing the victim’s plight. The public quickly joined in, spreading vitriol in article comments and on Twitter under the hashtag #RansackGate. What’s worse, Airbnb’s response was far from coherent. Media comments from the company and company spokespeople were inconsistent. At the same time, Y Combinator founder and Airbnb investor Paul Graham attacked the dramatic news coverage (expert in business communications?!) calling it “bullshit.” There was widespread confusion over whether the company was or would actually help the victim.

(source: Fortune)

Regardless of the changes in technology, the market for well-crafted messages will always have an audience.

Steve Burnett

Learning for young startups

It’s obvious that young startups which grow to be companies of full operations miss competence and know-how on the proven practices of the ‘old’ corporate world like Crisis preparedness and mitigation plans.

Corporate communications are needed to build Trust platforms in the global and local territories they will activate, bridging to stakeholders, to influence networks and political/institutional leadership. It’s about stories, content, actions, and visibility.

Sometimes they seem like believing that they’ll face only goodwill and public support as if they’re heroes of entrepreneurship. This isn’t true at all. There are so many hidden issues in the startup world (privacy, transactions, employee conditions, taxation, regulations, legal and consumer rights…) that you never know where you next crisis incident will hit your business continuity and perception.

Learning for company owners

You often hear the bloody fool and amateur reactions like “But We Have Email“, “We’ve opened comments to our Blog” – implying that they do have an open channel for audience dialogue.

Don’t think that an e-mail, the comments, and newsletters fit the purpose without a long view and the right narrative of your company’s direction. Don’t even think that your monthly team meetings are meaningful unless you have advocacy and ambassadors redistributing the message out there. These are personalized and unstructured approaches, invented by some manager who isn’t trained to handle the influence game.

Audiences don’t know what do you do inside and they don’t care. They simply observe, read, analyze what they see you do. I remember a job interview with a new Fintech co, which showed me they don’t have in place any corporate communication plan and they don’t intend to have one! But they were challenged already by the fast talent acquisition they do, in the ‘old-corporate’ world. You get it…

Leadership

Uber was hiding from media, stakeholders, and agencies for three years, in view of the London/UK regulator (“kicking the company out”). They insisted on the wrong reactive messaging “we’re not doing anything wrong”, and “we will appeal the decision”. Perception leaving behind? They don’t explain the core of accusations. I know, I’ve been for long fighting with complacent agoraphobic managers on the BS of reactive statements.

Beat, on the other hand, at least in the time needed, it showed real leadership. The company’s CEO was active and loud in all national media, even pushing a charge.org petition and social media. Loud voice, credible, explaining the case and asking for support from the public.

Uber is one of those cases, where you don’t know “who’s behind”. Expert tip for all young starters or established companies (for their C-level profiling): in all the surveys I’ve seen in my years, the public perception reaction “who’s behind… X company” is still relevant! What the audience wants to know isn’t a name, but a personification of company’s values and a perceived safety of interests. The Uber CEO didn’t -for example- cared to give a central, global interview to mitigate on the UK regulator rationale, who wrong or right hurt the company’s reputation.

Closing

I don’t write this piece because I was for long into corporate communications, but because Trust worries me. The absence of Trust creates unfavourable conditions in the wider economy. Any company who’s failing to build it, by intention or by mistake, troubles the entire market and citizen-consumer reactions and purchase cycles.

Tasos Pagakis is a Crisis communications expert within Telecoms, Energy, Pharma, Financial, and FMCG. Has participated in 8 company Merger & acquisitions. Worked for 42 ‘heavy-lift’ crisis including death by accident, Telco radiation, Company restructuring, Petroleum pipeline, Bribery allegations, Security systems, Food contamination, Network outage, Factory-river pollution, Consumer rights etc. As of 2016, he facilitates Crisis Preparedness Workshops for Companies and Authorities.