Uber & Beat, two different cases, one same pattern
Uber & Beat, two different cases, one same pattern: although modern business models and young companies, they don’t have in place a public affairs program to manage sever issues and a permanent corporate communication platform. Uber was hiding on its accussations, Beat 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
They don’t have in place a public affairs program to manage sever issues and a permanent corporate communication platform. Uber was hiding behind excuses when accused, and Beat 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 relationship with various publics, conveying clear what do you stand for and where do head at.
Back to basics: Corporate communication
Back to basics-II: without a plan, you don’t win
Uber was portraying to be a ‘hype’, the modern, global, arrogant (American) solution. Lots of 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? Nothing!
- Non-visible Leadership (isolation?)
- Low “Truth-Telling” and Brand advocacy by its employees (visible in public, online?)
- 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 favor of the taxi (old-cabs) regulated monopoly.
The role of government and regulation in Uber and Beat examples
Governments (UK, Russia, India, Greece) 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 crisis
When both companies were found in the fire of crisis, 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
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)
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)
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)
The case referred 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.
“Regardless of the changes in technology, the market for well-crafted messages will always have an audience.”
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.
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 waits.
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, 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. Some months ago I was called to a job interview with a new Fintech company, 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 …“we need a bonding culture”.
Uber was hiding from media, stakeholders, and agencies once more, as it did for three years, in view of the London/UK regulator, “kicking the company out”, trying to convey the message “we’re not doing anything wrong”, and “we will appeal the decision”. Perception: “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, 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.
I don’t write this piece because I was for long into corporate communications, but because Trust worries me. The absence of it is creating goodwill or unfavorable 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 cycles.