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New Book: The Agony of Decision by Helio Fred Garcia

Agony of Decision, Best Practices, Blog, Communication, Crises, Crisis Communication, Crisis Management, Humility, Leadership, Politics, Power of Communication, Reputation, Strategy, Worth Reading

Logos Institute is very pleased to announce the publication of a new book by Helio Fred Garcia,The Agony of Decision: Mental Readiness and Leadership in a Crisis, volume 1 of Logos Institute Best Practice Series. The book is also the first volume in our publishing imprint, Logos Institute for Crisis Management and Executive Leadership Press.

The book is now available for purchase here for individual or bulk orders. For a 15 percent discount, use the discount code QW9CFYKM. A Kindle edition is also available here on Amazon.

This book is about how leaders and the organizations they lead can maintain reputation, trust, confidence, financial and operational strength, and competitive advantage in a crisis.

Through Fred’s 30-plus years of professional involvement in thousands of crises affecting companies, governments, NGOs, and other organizations, he has discovered that the real value in resolving crises is not in excellent internal and external communication, nor in highest-quality tactical execution, however important they may be – and they are mighty important.

Rather, real value came from helping clients figure out and answer the bigger questions and then make the tough choices in a timely way. The execution would follow. So would the communication.

But people often misunderstand. That’s why Fred felt the necessity of writing this book — to help leaders think clearly, plan carefully, and execute effectively when facing high-stakes decisions. A wise man once said, the only meaningful way to escape the agony of decision is by thinking.

This book is for leaders of organizations who need to be good stewards of reputation, trust, and competitive advantage; and for those who advise those leaders, whether in public relations, law, or other business disciplines. We hope you find it helpful.

July 20, 2017/by Yinnan Shen

Charisma and Humility in American Politics, Guest Blog by Yinnan Shen

Blog, Communication, Humility, Leadership, Politics, Worth Reading

This is the eighth in a series of guest blogs featuring my recently-graduated capstone (thesis) advisees in New York University’s Master’s in Public Relations and Corporate Communication.

See my earlier posts:

In this blog Yinnan Shen summarizes her capstone on the best blend of charisma and humility to assure success in American presidential politics.

As she shares in her introduction, Yinnan, who did her undergraduate work at Beijing Language and Culture University, came to the United States with an idealized view of American politics. The last presidential election was the first she saw up close. She chose her capstone topic not only to make sense of this election, but also as an opportunity to dive deeply into American history, politics, and culture in the past 60 years.

While both charisma and humility have been studied extensively, there is very little study of the combination of the two, especially in politics. Her contribution is a good start on a topic that is ripe for continued study: how to balance the seemingly contradictory personality qualities of charisma and humility.

You can download her capstone here.

This week Yinnan starts work as a research analyst at Logos Consulting Group.

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Charisma And Humility in Political Leadership

by Yinnan Shen

Yinnan Shen

2016 was a very interesting year for me, a foreigner who has a keen curiosity about American politics, to experience living in the States. I mean the presidential election part.

I arrived assuming that people are all rational, that there should be a rigorous system with a rigorous standard for choosing the president. That voters rationally assess each candidate referring to that standard, checking boxes, to pick the best candidate to become their president. But sorry Adam Smith; we humans don’t actually make rational choices.

Furthermore, the gap between reality and perception also gets in the way of making rational judgments.

That’s why charisma and humility comes into play in political leadership election and retention. Self-identification and emotion are two key drivers of followers in determining whom to vote for. And charisma and humility appeal directly to followers’ self-identification and emotion, affect their decision-making process unconsciously.

Also, charisma and humility are complementary in assessing a political leader. Humility can prevent charismatic leaders from being egocentric, arrogant, or corrupted.

My capstone therefore takes a deep dive into political leaders’ charisma and humility, and their correlation with political election and retention in the United States of America.

The methodology of this research is simple; build the measurements of humility and charisma first, and apply the measurements on candidates of historical presidential election cycles to find the correlations.

Measurements of Charisma and Humility

In the first part of my capstone, I studied theories on defining and measuring charisma and humility in the history, and then defined the two characteristics and identified key components of them based on past research and my own understanding. I developed a 10-item scale of charisma and a 5-item scale of humility.

Charisma definition: a set of extraordinary qualities and behaviors that inspire admiration, loyalty, and devotion among people, and that naturally separate the individual who possess these qualities from average people.

Charisma measurement:

Leader’s behavior and attributes:

An idealized and even prophetic vision. Having a captivating vision that projects an idealized future for the followers is the foremost characteristic of charismatic leaders. The vision that he or she proposes is most likely to be a challenge to the status quo, a promise to change what has been done wrong in the past to actually excite follower’s trust, sense of belonging, and sense of mission.
Articulation. The articulation of the vision is the key to help the vision reach the  audience. Charismatic leaders are usually seen to be eloquent and persuasive – to be the masters of communications. Additionally, their tone of voice is always found to be captivating and engaging.
Sensitivity to the environment. Charismatic leaders are most likely to rise from chaos or crisis. They tend to catch subtle trends and patterns of the world around us, which enables them to seize and even create opportunities before anyone else even notices. And this is the birth of their visions.
High empathy. To arouse trust and self-identification with the collective, charismatic leaders are able to empathize with each individual’s needs and emotions, which usually results from their genuine interest in people. Charismatic leadership is actually more intuitive and sensitive than other types of leadership.
Bold and unconventional strategies and tactics to achieve the vision. Charismatic leaders’ visions are convincing only when they go hand-in-hand with revolutionary strategies and tactics in the process of vision implementation.
Willingness to take risks. Leaders are usually perceived as charismatic when they show their willingness to take great risks in making choices. The risk can be personal, or it could be a collective risk that helps achieve a greater good or a collective goal. The charismatic leader stands out when no one else is able to make these “scary choices.”
Confidence in him or herself, as well as in followers. Charismatic leaders usually have high self-esteem, but more importantly, in order to arouse followers’ loyalty and devotion, they also have belief /faith in their followers. They let followers feel well-involved in reaching the collective goal.
A strong will. A strong will is a necessity for charismatic leaders. They usually have an inexorable will to do what they set mind to. And their drive and persistence can have such a strong influence over followers, and make the followers believe that they will definitely achieve their goals.
High level of trust from followers. Followers trust no matter what the leader proposes or says, and have no doubt in the leader’s abilities to reach the desired vision.
Considered a role model by followers. Charismatic leaders are always perceived as a role model who is everything the followers want to be. They are even idolized sometimes, as if they possess some heroic virtues or divine gifts. The followers also highly identify themselves with the leader. It’s a more personal reaction, usually as a consequence of deep connection, trust, and admiration.

Humility definition: a virtue allowing people to have an accurate self-assessment and think less of themselves.

Humility measurement:

Openness. Usually perceived as approachable and able to relate with others, people with humility have the candor to tell the truth, to offer transparency, to open up room for people to get close to them.
Tolerance and forgiveness. An individual with humility is able to listen to contradictory opinions, accept honest advice, appreciate difference, and is open to new ideas. Humility also requires one to not hold too much of a grudge against others, and humble leaders tend to be more understanding than others.
An accurate self-assessment. They usually have an accurate assessment of themselves, including their abilities, strength, and accomplishment. An accurate self-assessment also means that they are able to recognize their mistakes and take responsibility accordingly.
Self-forgetfulness. To have humility, one ought to view him or herself less importantly, which mean they value other people’s inputs, and even put other people’s interests before their own.
Highly secure. Contrary to common knowledge, people with humility actually have high self-esteem and sense of security. They assess themselves and the world precisely, so that other people’s thoughts are less likely to get in the way of making their own choices and their self-assessment. They are also secure enough to show vulnerability, and less likely to exhibit caution and anxiety.

Application on Historical Presidential Election Cycles

In the second part, I studied candidates’ biographies, news reports, opinion polls, speeches, and interviews of the designated political leaders (both the one who won and the one who lost in their respective election cycle). I also conducted in-depth interviews with people who had exclusive insights about those candidates’ personalities,

I applied the measurements on both elected and non-elected candidates in each cycle to grade each candidate’s charisma and humility. For each charisma or humility attribute a candidate exhibited I awarded one point in that respective category. The results are below, in which the darker colored rows represent the winning candidates.

Conclusions and Guidance on Political Leadership

Using the research results, I drew the four graphs, one per election studied. I took each candidate’s charisma score (x) and humility (y) as this candidate’s coordinate (x, y), and marked it on the corresponding graph. Red dots represent winning candidates and blue dots represent losing candidates.

The blue quarter circle shaded areas were drawn using the radius that equals the distance from the blue dot to the origin. If we use the linear distance between each dot and the origin, the distance represented by z as a representation of this candidate’s overall performance of charisma and humility, then the blue shaded area means the overall performance of charisma and humility that is less/equal to the losing candidate.

No matter how the x and y varies in each election cycle, the red dots always fall out of the blue shaded areas. That being said, the z value, named as C-H Value, of the winning candidate is always greater than the z value of the losing candidate.

The model implies that political leaders who have a better overall performance of charisma and humility gain more support in political election. It can be applied on any given political candidate, in conjunction with the measurements the capstone created to calculate a candidate’s charisma and humility scores. As long as we have a certain candidate’s charisma score (x) and humility score (y), we’ll be able to calculate his or her C-H Value and compare it to his or her rival’s, in order to have a better understanding of the election result. The model facilitates the interpretation of past election results and helps predict future elections.

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July 3, 2017/by Helio Fred Garcia

How Obama Channeled Reagan and Washington in His Farewell

Blog, Communication, Language, Leadership, Politics

Last week’s viewers might have felt the president’s inclusiveness, but history will remember his dire warnings.

Ten days before handing the Oval Office keys to a successor famous for his mega-rallies, Barack Obama gathered one last huge crowd of his own. His January 10 farewell address was all about his 20,000 admirers at Chicago’s McCormick Place.

“You made me a better president,” Obama said, “and you made me a better man,” Over the course of his 4,267-word speech – the longest presidential farewell of the broadcast era – he used “you,” “your,” or “yours” 81 times. That’s 19 “you” words per 1,000 total words, besting Ronald Reagan’s 1989 mark of 12 per 1,000.

As with inclusive “we” words (like “we,” “us,” and “ours”), the use of “you” words is a hallmark of effective leadership communication. According to Quantified Communications CEO Noah Zandan, who studies and advises on public speaking, visionary leaders like Tesla’s Elon Musk and Facebook’s Sheryl Sandberg use “you” words 60 percent more often than the average speaker.

More popular presidents use more “you” words, too. Obama reflected the glow of his 56 percent approval rating in the latest Gallup tracking poll, ending a list of accomplishments by telling his audience, “That’s what we did. That’s what you did. You were the change.”

Reagan, who left office with a 62 percent approval rating and a nickname as “The Great Communicator,” did much the same in his farewell address. “I’ve had my share of victories in the Congress,” he said, “but what few people noticed is that I never won anything you didn’t win for me.” Reagan also laced the speech with vivid portraits of presidential life, putting watching Americans in his shoes. “You spend a lot of time going by too fast in a car someone else is driving, and seeing the people through tinted glass … And so many times I wanted to stop and reach out from behind the glass, and connect. Well, maybe I can do a little of that tonight.”

Among the seven farewell addresses of the broadcast era, there’s a clear correlation between the frequency of “you” words and the president’s final approval rating – tighter than the slightly positive relationship between “we” words and approval, or the slightly negative one between “me” words and approval.

“You” words are likely both a cause and an effect of the public’s thumbs-up. It’s possible that “you” words are a president’s response to high approval, as when Obama said, “You are the best supporters and organizers anyone could hope for, and I will forever be grateful.” Or, “you” words could be a driver of high approval, convincing voters that the president cares about them: “I am asking you to believe,” Obama said, “Not in my ability to bring about change, but in yours.” (Obama used the word “change” 14 times in his farewell address, echoing his final State of the Union last year and, most of all, his 2008 campaign.)

However, the part of Obama’s swansong that will most likely capture the attention of 22nd Century historians isn’t his inclusive tone. It’s when he drew on the mother of all precedents, George Washington’s hand-written 1796 farewell letter, to go from eulogy to sermon and back again. Bookended by a list of accomplishments and a list of thanks, Obama devoted the middle 57 percent of his speech to warning of three “threats to our democracy:” Economic inequality, racial division, and political partisanship.

“Democracy does require,” Obama intoned, “a basic sense of solidarity – the idea that for all our outward differences, we are all in this together.” Or, in Washington’s words, “You should properly estimate the immense value of your national union to your collective and individual happiness.”

The similarity wasn’t lost on Obama, who at one point even cited his source. “In his own farewell address, George Washington wrote that self-government is the underpinning of our safety, prosperity, and liberty, but,” Obama said, quoting Washington, “’from different causes and from different quarters much pains will be taken … to weaken in your minds the conviction of this truth.’”

The most famous phrase of any modern farewell address is a warning, too. Dwight Eisenhower coined the term “military-industrial complex” to warn of runaway defense spending as he left office in 1961.

For more, follow @Tiouririne on Twitter.

January 19, 2017/by Adam Tiouririne

Female Leadership and Trust: Guest Blog by Carolina Perez Sanz

Best Practices, Blog, Communication, Language, Leadership, Neuroscience, Trust, Uncategorized, Worth Reading

by Helio Fred Garcia

This is my seventh in a series of guest blogs featuring my recently-graduated capstone (thesis) advisees in New York University’s Master’s in Public Relations and Corporate Communication.

See my earlier posts:

In this blog, Carolina Perez Sanz summarizes her capstone, focusing on the particular challenges women face in a workforce where men disproportionately fill the top positions. This could apply to banking, engineering, or any other industry.

And Carolina develops insights that would apply to all similar sectors.

But her primary focus is public relations, where women are 70 percent of the workforce but only four percent of the leaders.

Carolina completed a PhD in applied linguistics at Instituto Universitario de Investigación Ortega y Gasset in Spain. She is also a certified speech therapist. For her PhD she did extensive research into how female broadcasters use their voices when performing on the air.

Her dissertation, “Laryngeal Adjustments in the Voice of Female Broadcasters,” uses a technique called electroglottography to analyze the physiology of professional broadcasters’ larynxes when using their conversational speaking style and when using their professional speaking style. She showed that when speakers hyper-articulate, not only do they move their jaws, lips and tongues faster and more strongly, but also their larynxes.

She also writes her own blog, Power at Speech, that focuses on how voice and speech influence the perception of public figures’ personalities.

Carolina, who just received her M.S. in public relations and corporate communications from New York University’s School of Professional Studies, moved from science to social science, looking at women in leadership.

She takes into account cultural and personal biases, and also reflects on current insights on leadership generally.

She builds an interesting model based on trust at three levels of leadership:

Being trusted to perform tasks
Being trusted to manage projects
Being trusted to lead people

She notes that many women find themselves stuck at the first or second level, and offers strategies to overcome this self-sabotage.

Her insights can help women in public relations and other fields reverse much of the marginalization they experience, and build more fruitful careers.

You can download the entire capstone here.

Female Leadership: How Women Can Inspire Trust and
Become Leaders in Male-Dominated Work Environments

by Carolina Perez Sanz, PhD, MS

Carolina Perez Sanz, PhD, MS

If being very good at what one did was the critical factor to becoming a leader, the business world would look very different. Competence is necessary, but certainly not enough to taking on the mantle of leadership.

In the highly feminized industry of public relations, the disproportionate numbers between female employees (70%) and female top leaders (4%) gives proof of this disparity. Women get the work done because they excel in competence and ability, but it is men who set the goals and strategies for the firms.

The reason is that inspiring trust, and not mastering skills, is the defining trait of leaders.

Trust Is Key

Trust happens (or does not) between two people in a relationship. It is complex and nuanced, and different factors on both sides of the relationship contribute to bolster or cripple it.

The trustor (the person who trusts) needs to be in a psychological state of trust. The context of the relationship, personal and social biases, and the reputation of the other party influence the trustor’s inclination – or lack of thereof – to trust.

Factors That Contribute to Trust

The trustee (the person to be trusted) needs to appear trustworthy in the eyes of the trustor. To do so, he or she has to possess and display certain characteristics.

The typical features that boost trustworthiness are grouped into three categories: ability, integrity and benevolence.

Ability: “I Can”

Ability encompasses the capabilities that professionals have that allow them to perform the assigned tasks. It includes the knowledge, experience, expertise and skills that are in the realm of the work that needs to be done. The expression ‘I can’ symbolizes the Ability level of trust.

Gardeners prove ability with their knowledge about plants, soil and weather, their patience, or their photographic memory. For neurosurgeons, ability includes a steady hand, a deep knowledge of brain anatomy, or being able to concentrate for long periods.

Integrity: “I Will”

Integrity is built on behaviors such as keeping one’s word, being loyal to the other party and the relationship, and respecting a set of values that both parties adhere to. The Integrity level reflects an ‘I will’ attitude.

Mail carriers exhibit integrity when they deliver the mail in a timely fashion to the right recipients, or when they don’t disclose mailing information to other recipients or senders. Public relations professionals show integrity by not working for a client’s direct competitor, or by not sharing clients’ confidential information.

Benevolence: “I Care”

Benevolence entails being able to put the other party’s objectives ahead of our own, demonstrating good will towards the other party in a business relationship, and caring for them more than we care for ourselves.

But it doesn’t mean sacrifice for the sake of an abstract concept of goodness, or avoiding hurting other people’s feelings. In business contexts, being benevolent means to behave in ways that are best for our clients and/or company. ‘I care’ summarizes the Benevolence level.

For advisors, benevolence entails speaking truth to power. They show benevolence because they act in the boss’s or client’s best interest and are ready to put their own position at risk. Attorneys demonstrate benevolence when they turn down cases that they cannot win.

The Competence – Trust Gap

The Three-Level Model of Trust provides an explanation for the imbalance between women’s participation in the workforce and their share of leadership. As Climb Leadership Consulting president Chuck Garcia very accurately told me, “Women strive for perfection, while men strive for progress.” In other words, women excel in the ability level.

Three Self-Sabotaging Mistakes

Perfectionism leads women to three common self-sabotaging mistakes that undermine their ability to inspire trust and hence, stifle their leadership potential.

Deference to authority
When women’s most important objective is to deliver spotless, perfect work, they reflect that they expect that an authority figure will judge them and their work.Because they defer to a higher authority, they tend to hold back in meetings.Expecting (and fearing) to be judged, they prefer not to share an idea lest it be imperfect.And since they believe they need someone to validate their ideas, they are not assertive. Striving for perfection makes some women berate themselves for the mistakes they make.Again, their fear to be judged compels them to self-justify before someone starts pointing fingers at their mistake.
Inability to create and project a vision
When they berate themselves for not being perfect, they show their inability to see errors as points in time and necessary steps for progress. They get stuck in what went wrong and why, which prevents them from looking to the future and finding the solution.Women apply only for jobs they feel they are perfect for.According to LeanIn.org, women don’t apply for jobs unless they meet 100% of the criteria, while men apply when they meet 60%. Besides insecurity, this habit reflects these women’s incapability to envisage their future selves. They can’t foresee how they will change and learn on the job because they consider only how they are now.

Lack of benevolence
The perfectionist’s main objective is to be judged well. Benevolence, on the contrary, implies being able to erase oneself and work in the other party’s best interest.When women strive for perfection, they imply that they care about how they appear to others more than they care for others.

Bridging the Gap

While aiming at high quality standards is commendable, women need to get past the “worker ant” stage if they want to reach top leadership positions.

Showing authentic care for the objectives of others is what defines leaders.

When speaking in public, leaders care about the audience and help them connect. When leading teams, leaders care about the followers and help them thrive.

When leading a company, leaders embody its vision and help employees work strategically towards the ultimate goal.

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You can download the entire capstone here.

December 31, 2016/by Helio Fred Garcia

Logos President Co-Authors Crisis Article in Leading Korean Business Journal

Best Practices, Blog, Communication, Corporate Responsibility, Ethics, Leadership, Power of Communication, Reputation, Rumors, Strategy, Trust, Worth Reading

Logos Consulting Group president Helio Fred Garcia co-authored an analysis of one of South Korea’s biggest crises of 2016 in Korea’s leading business journal, Dong-A Business Review.

The analysis was co-authored with Dr. Hoh Kim, founder, head coach, and facilitator at THE LAB h in Seoul, Korea.

Dr. Hoh Kim, founder, The Lab h, Seoul

Dr. Kim, former head of Edelman’s Korea office, is a certified trainer in the Cialdini Method developed by Dr. Robert Cialdini, and a certified coach in the Marshall Goldsmith Certified Stakeholder Centered Coaching method. Dr. Kim is the primary author of the Dong-A Business Review analysis.

Their article examines the crises surrounding The Lotte Group, one of Korea’s leading industrial conglomerates. Lotte Group consists of more than 60 business units and employs 60,000 people in such industries as hotels, beverages, candy manufacturing, fast food, retail, financial services, chemicals, electronics, IT, construction, publishing, and entertainment.

In October Lotte Group’s Chairman, Shin Dong-bin, was indicted on tax evasion, embezzlement, and other charges. His sister, Shin Young Ja, was arrested several months before for embezzlement and bribery.

Lotte Group is one of Korea’s chaebols, family run business conglomerates, a common form of business organization in Korea.

You can download the complete original Korean language version of the analysis here.

An English translation follows below:

The Crisis Management of Lotte

‘A red team’ that challenges a corporation from within is necessary
in the era of ‘reputation management’

Co-authored by

Hoh Kim, Founder, Head Coach & Lead Facilitator, THE LAB h and
Helio Fred Garcia, President of Logos Consulting Group

Published at Dong-A Business Review (DBR), December 2016 Issue 2 (No. 215), pp. 90-94, in Korea

AUTHORS

Dr. Hoh Kim graduated from Hankuk university of foreign studies, where he majored in French literature and philosophy. He earned his master’s degree in PR at Marquette university and his Ph.D at Graduate School of Culture Technology, KAIST. He is one of the 19 Cialdini Method Certified Trainers (CMCT) approved and endorsed by Robert Cialdini, the author of Influence: The Psychology of Persuasion. He has previously led the Korea office of Edelman, a global PR firm and written several books including Cool Apology (co-authored), Cool Survival Kits, Reputation Society (co-authored) and Why I Can’t Say No (all in Korean).
Dr. Helio Fred Garcia is the founder of Logos Consulting Group and has more than 35 years of experience in crisis management, executive coaching and consulting. He is an adjunct professor of management in NYU’s Stern School of Business Executive MBA program, where he teaches crisis management. He is the author of The Power of Communication: Skills to Build Trust, Inspire Loyalty, and Lead Effectively, and is the co-author with John Doorley of Reputation Management: The Key to Successful Public Relations and Corporate Communication, which was translated into Korean and published as Reputation Management Strategy in Korea by Alma Press in 2016.

ABSTRACT

According to the book Reputation Management Strategy, the formula for reputation is ‘Reputation = (financial) performance + (organizational) behavior + (corporate) communication’. The Lotte crisis has largely been triggered by problems with its organizational behavior. First, ‘an owner risk’ has occurred in leadership behavior and second, in corporate behavior dealing with its customers and business partners, the company led people to believe that it is not an ethical company. Finally, Lotte has failed in communication because there has been a huge gap between its short-term responses, actual leadership behaviors and its nominal long-term vision.

This article offers suggestions for Korean companies that are facing challenges similar to Lotte’s.

For starters, companies need to get stakeholders to be involved so that they can constantly challenge the companies from the outside. Second, corporations need to have something like ‘a red team’ or ‘a devil’s advocate’ within the organization so that they can bring genuine change to corporate behavior.

ARTICLE

This year the Lotte Group experienced its worst crisis. Here are some questions we need to ask concerning the issue:

Q1. How did people first respond to the scandal? Did they say “No, Lotte would never do such a thing” Or did they say “I told you so”.
Q2. How would you respond if someone tells you that you are acting just like Lotte? Would you feel flattered or offended or just regard the comment as neutral?
Q3. Lotte has made several promises to reform it. Which one impressed you the most? Do you really believe that the company will keep the promises?

We will explain later why these questions matter for Korean businesses in terms of crisis management. In the meantime we want readers to find the answers to the questions on their own.

For the most part, when we analyze a case, we take a careful look at it as if cameras zoom in. And then we figure out what the problem was and how the problem should have been solved. But in the case of Lotte, one of the authors (Dr. Hoh Kim) thought that when it came to solving the problems there was little Lotte could do in the short term. There were three reasons for this.

First, the core of the crisis lay in conflicts among three members of the founder’s family.
Second, the founder has failed to smoothly pass down the business to his children, which should have been done over the course of years or decades.
Third, it is only the founder and his family who could have prevented these problems.

In this article we’d like to talk about Lotte’s crisis management from a reputational perspective.

In the field of crisis management, there is something called issue index. The index refers to a list of potential issues that might occur to a company in the future. When we were reading news articles about the 2016 Lotte crisis, it almost felt like we were seeing the issue index of Korean conglomerates in general. Of course, how dangerous the problems are and how the issues affect the businesses can be different from company to company.

But it is worth looking into the Lotte case because so many Korean conglomerates share the same kinds problems as Lotte. Conflict over succession and slush funds are a good example.

The authors discussed how we could approach the Lotte case and decided to suggest a common tool that can be applied to other Korean chaebols. (Chaebols are large Korean business conglomerates, mostly family led.)

We believe that it would be helpful to develop ‘a mirror’ that other companies or business people could use to reflect themselves, not ‘a mere window’ through which other conglomerates may just watch and do nothing. But a mirror to create self-awareness.

Also, with this analysis we’d like to present the last puzzle piece to Korean chaebols that can help them advance their management of crisis and reputation.

One Element in the Reputation Formula that
Most Korean Conglomerates are Missing:

The book Reputation Management Strategy that Dr. Garcia has co-written with John Doorley introduces a reputation formula as below:

Reputation =
(Financial) Performance + (Organizational) Behavior + (Corporate) Communication

The seriousness of the Lotte crisis lies not just in legal risks that it might face but also in a damage to its reputation.

The crisis facing Lotte at the moment is completely different from a crisis that a conglomerate might encounter when it fails to do well in its operations. The current Lotte crisis is highly likely to directly hurt its reputation. So in this case one of the most important crisis-management goals is to recover reputation.

What lessons can the reputation formula offer to Korean Chaebols as a whole as well as to Lotte?

The three elements in the formula are:

1. Financial Performance
  - Long-Term Performance
  - Short-Term Performance
2. Organizational Behavior
  - Leadership Behavior
  - Behavior Towards Others
  - Behavior Towards Society
3. Corporate Communication
  - Tactical and Short-Term Communication v. Strategic & Long-Term Communication
  - External Communication v. Internal Communication

Financial performance, as an element that affects reputation, has two factors: long-term performance and short-term performance. Long-term performance can include profits of the last 10 years or long-term growth potential. Profit for the year is an example of short-term performance. In the case of Lotte, financial performance was not the major factor that affected its reputation.

When it comes to organizational behavior, there are three factors:

The first is leadership behavior.
When the Lotte crisis took place, the behavior of the founder’s family was broadcast almost in real time and not just Lotte employees but also the public were able to learn about it. The conflict among the family members exposed various problems within the chaebol including opaque business practices and governance structure, and succession-related problems. And all these conflicts still remain unresolved. What is unique about founder’s family-related problems is the fact that both the crisis maker and the crisis manager are the founder and his family dynasty. This is a serious problem because it is almost impossible for the employees to take actions to solve the problem. All they can do is simply following orders from the founder’s family.
The second factor of organizational behavior is about consumers and business partners.
This includes how satisfied consumers are with the products and services provided by Lotte and what its partners (vendors) think of working with Lotte.
The third factor is about corporate behavior towards society.
So-called ‘Corporate Social Responsibility’ is a good example of this. In October, Lotte’s Chairman, Shin Dong-bin, made a public apology and announced reform plans. In the plans, he adjusted the original growth target of increasing its sales to 200 trillion Won (Korean currency) by 2020 and of becoming Asia’s tenth largest company. He then shifted his focus to corporate social responsibility, particularly philanthropy, and said he would put more emphasis on meeting people’s expectation and promoting social values. He stopped short of detailing his plans for fulfilling corporate social responsibility.

In fact, what really matters when it comes to corporations’ social behavior is not philanthropic activities but how companies make profit.

As a matter of fact, in ISO 26000, an International Standard providing guidelines for social responsibility, the word ‘philanthropy’ is mentioned only once. According to the standard, how responsible a company is depends on how much the company contributes to things like human rights, labor practices, the environment, fair business practices, consumer issues and local communities. ISO asserts that corporate social responsibility is about how to make a profit, not about what to do with profit. In other words, to become socially responsible, a company needs to make profit in positive ways. Whether it engages in charitable activities or not is a minor issue. Korean chaebols need to do more in this regard.

Corporate communication, the last factor of the reputation formula, includes both tactical and short-term communication activities like press release and press conference, and strategic and long-term communication activities such as creating corporate missions, visions and values.

Another form of corporate communication includes communication with consumers and the public and communication with employees. If you go to Lotte’s website(lotte.co.kr), you can find its management policies. The first policy is about transparency and it reads: “we shall promote transparency in our operation and financial performance by tightening self-monitoring systems and strengthening regulatory tools”.

The company also says that it shall put the idea into practice by establishing a system that helps its shareholders understand how the company is doing, by honestly sharing management-related information and decision making and by actively supporting the board of directors and creating a committee that promotes transparent business practices.

One of the core values of the company is responsibility and it reads: “we shall always honestly run the business and contribute to social development by fulfilling our social responsibility. And its action guidelines read: we shall not cover up our mistakes and immediately inform our mistakes and correct them; we shall execute our tasks according to legal, ethical and social standards.”

Lotte is being criticized because there are gaps between its corporate communication and organizational behavior, particularly its leadership behavior. This Say-Do Gap is the key problem.

One could conclude that Lott’s statements of corporate vision, values and action guidelines are just meant to be framed and hung on the wall. One might also add that in reality no company takes these things seriously.

But stated values create expectations. And trust rises when expectations are met; falls when expectations are not met.

If corporate founders ignore the management policies and detailed action plans that they themselves have created, they will face a situation where it is almost impossible to exercise their leadership because they will lose the trust of those who matter to them.

This is the last piece in the reputation puzzle that Korean conglomerates need to improve. Korean chaebols have been able to show world-class business performance through innovation in their products and services. They also have heavily invested in advertising and promotion and have seen great improvement in their corporate communication.

However, they are rightly criticized for failing to make a meaningful change in their corporate behavior, particularly in their leadership and social behavior. The founders and chief executives of chaebols create ‘great’ visions and values for their companies, but top management themselves often do not take these visions and values seriously. In today’s world, where it is easy to monitor corporate behavior and where stakeholders have easy access to information, organizational and leadership behaviors that haven’t been detected before now can greatly influence corporate reputation.

As we analyzed the Lotte case, we defined the gap among performance, behavior and communication as the fundamental cause for loss of Lotte’s reputation.

Korean chaebols as a whole often have gaps in their business, not just the gap between behavior and communication, but also between performance and communication and between performance and behavior.

So far, when Korean chaebols have faced a crisis as a result of their mistakes and wrongdoings made public, they have done all the same as if there is a formula for such situation: to issue an apology, hold a press conference, take a bow and make some promises. But, few companies have kept their promises and now few consumers and citizens believe them.

One of the most important jobs of the public relations departments of large companies in Korea has been to stop scandals involving their founder’s family dynasty from spreading. This year Koreans saw massive protests against the government that have been symbolized as candles. In this circumstance one might wonder if Korean conglomerates will be able to continue to make profit (performance) and manage crises and their reputation in the way they have been doing for a long time. Will that be possible without changing their behavior?

The Last Piece of Puzzle:
Will They Change Their Behavior?

The important question that conglomerates, founder’s families, and executives need to ask themselves is whether they are going to change their behavior.

The challenge that Lotte chairman Shin Dong-bin faces now is not to overcome this crisis but whether he changes the corporation’s behavior. If he doesn’t, the company might face another similar or worse crisis in the future.

What can businesses do to change their behavior? We get some ideas from a behavior-change model in the leadership field, not from the crisis-management field.

Dr. Marshall Goldsmith, the world’s leading leadership coach, says that stakeholder engagement is the most important factor in changing corporate behavior. So, for example, if one is to quit smoking, he needs to let his colleagues know about his decision. When around him are engaged they can watch to determine whether he changes his behavior. As a result, he is more likely to become determined to change. This is part of why many people sign up and go to the gym, or team up with others to exercise. They aim to change their behavior by engaging stakeholders.

In October, Lotte chairman Shin announced reform plans and said that he will establish a watchdog committee that will be directly monitored by him and hire experts from outside. Will this committee be able to lead the conglomerate to change?

To succeed, the committee must be able to act like a red team.

A red team refers to a structure similar to a devil’s advocate — someone who is actually a member of the organization but monitors and points out problems from the opposite point of view in the interest of that organization.

If Lotte has such a committee just for appearance’s sake, the effort is highly likely to fail.

In the beginning of this article, we asked three questions. Now we’d like to explain why such questions matter and what our answers are.
In order for companies to change their behavior, nothing is more important than to figure out exactly how their stakeholders think of them. In fact, many Koreans have negative perspectives of Korean conglomerates.

If the founders of big corporations or chief executives are to properly manage crises and reputation, they need to understand how those who matter to them view them. When a disaster takes place or when the end of the year is near, chaebols often donate hundreds of millions or even billions of Won (Korean currency) to those in need. They even encourage their employees to perform community services. So big companies often complain that they are unfairly criticized because they actually do many things for communities.

Here’s a question: If chaebols raise their donations by two to three times or perform more community service, will their stakeholders have a better view of them?

We don’t think so, because people’s fundamental ideas of chaebols are negative. Many take conglomerates’ donations and community service for granted because they believe that chaebols must give some money for the poor at the end of the year because they have done so many bad things all the year round.

What kinds of strategies should conglomerates adopt to effectively manage their reputation and crises? And how should they put the strategies into practice?

In most cases, there are two types of behaviors that chaebols engage in facing a crisis. First, they engage in behaviors that make their negative image worse. Such behaviors include cover-up, lie, evasion of responsibility, denial and even blaming victims — just as recently happened when a daughter of Korean Air Line’s chairman threw a fit, angrily insisting that a plane she was on return to the gate of an airport. These kinds of behaviors reinforce consumers’ negative views of chaebols.

The other type of behavior is the ones that contrast sharply with people’s negative perspectives. For instance, the public found it surprising when a daughter, not a son, of the founder’s family of a big company had joined the navy as a naval officer. The public knew that the decision was not made to improve the image of the company but still found it pleasantly surprising.

Also, when Korea was hit by the Middle East Respiratory Syndrome pandemic (MERS), Samsung’s Vice Chairman JY Lee conceded his company’s fault and sincerely apologized to the public. This gave the public an opportunity to fix their negative perceptions towards chaebols because most people thought that chaebol owners would deny their responsibility when a crisis takes place.

Of course, if Korean conglomerates are to overcome crises and transform their image, they need to do more than just create a temporary surprising event. Corporate founder’s family must be determined and engage in consistent “surprising behaviors.”

Protesters holding candles are calling for change not just within the government. They are sending a strong signal that there must be a paradigm shift in chaebols’ management of crisis and reputation.

The public is calling for change in corporate behavior. We each have public relations experience and have long worked in crisis management and strategy communication consulting. The conclusion that we want to share with readers is clear: If one approaches crisis and reputation management from the perspective merely of public relations, one is bound to fail.

Food for Thought

1. 1. What kinds of images do publics have about my company? Apart from the products and services that my company provides, how do publics think of my company? Do they think of it as the one that coexists with, is mutually beneficial with and contributes to society? Or as evil? If the latter, why is that? What are your solutions to fix the image?

1. 1. It is difficult to improve corporate reputation merely by engaging in some corporate social responsibility efforts and philanthropy or by handing out some corporate leaflets. To get positive reputation, the entire company needs to make an effort to create social value, and this approach should be the center of profit-making process. The reason why this approach matters is the reason why the CSV (creating shared value) strategy matters. Does my company take CSV seriously? Does it have a team that puts the idea into practice?

# # #

Note:

Reputation Management: The Key to Successful Public Relations and Corporate Communication, by John Doorley and Helio Fred Garcia, was originally published in 2007. It is now in its Third Edition in English. A Korean translation was published as Reputation Management Strategy in 2016. A Chinese edition is scheduled to be published in early 2017. A French language edition is now underway, due to be published in late 2017.

John Doorley is a Visiting Associate Professor at Elon University in Elon, North Carolina, and a Director in Mindful Reputation. He is a founding academic director of New York University’s MS in Public Relations and Corporate Communication.

Dr. Hoh Kim and Helio Fred Garcia began working together in September, 2015 when Dr. Kim was the moderator and Mr. Garcia was a keynote speaker in the Chosun Issue Forum, a conference on crisis management in Korea sponsored by Chosunilbo, Korea’s leading newspaper.

Dr. Hoh Kim, left, moderating a panel discussion at Chosun Issue Forum, Seoul, September, 2015

December 23, 2016/by Helio Fred Garcia

Does Brand Loyalty Always Help in a Crisis?: Guest Blog by Nicky Honghao Ruan

Best Practices, Blog, Communication, Crises, Crisis Communication, Crisis Management, Power of Communication, Strategy, Trust, Uncategorized, Worth Reading

by Helio Fred Garcia

This is my sixth in a series of guest blogs featuring my recently-graduated capstone (thesis) advisees in New York University’s Master’s in Public Relations and Corporate Communication.

See my earlier posts:

In this blog, Nicky Honghao Ruan looks at the issue of brand loyalty, and makes a counter-intuitive discovery: Sometimes, very strong brand loyalty can make companies’ crises worse than if they don’t have brand-loyal customers.

Nicky explores a range of crises affecting different kinds of organizations, and identifies the criteria of the organization, of the customers, and of the crisis that predict whether brand loyalty will help or hurt an organization in crisis.

Better yet, she provides a template that can help leaders and their advisors anticipate what will work and what will hurt, and to adapt accordingly. Worth reading.

You can download the entire capstone here.

Brand Loyalty in Crisis:

How does strong brand loyalty affect a company during crisis under different circumstances?

by Nicky Honghao Ruan

Nicky Honghao Ruan

Consumers are familiar with programs like “My Coke Rewards,” “Marriott Rewards” or “AAdvantage,” that help to contribute to a core marketing concept — brand loyalty.

Brand loyalty has long been endorsed by marketing experts as an intangible asset for a company or organization. Conventional wisdom suggests that strong brand loyalty can empower a company to overcome crises, but practitioners often overlook the potential risk of strong loyalty when the nature of the crisis changes. In some cases, strong brand loyalty does not shield a company from crisis, but can instead become a liability because the high expectations of loyal customers were not met.

Through case studies, in-depth interviews with crisis management experts, and public surveys, my capstone examines the interplay between crisis conditions and the role of strong brand loyalty, and identifies various causes for both helpful and harmful outcomes.

As a result, I developed a model for crisis management professionals to quickly evaluate whether to incorporate a brand’s loyalists as defense strategy, or instead to plan for ways to prevent the extra harm that could instead be created by loyalists.

Mapping the Template

Brand loyalty is more likely to help a brand under conditions in the left column (green), and more likely to harm one under conditions in the right column (red).

At the same time, those criteria in the top row (darker color) would have stronger impact than those in the bottom row (lighter color).

The one that falls in the middle column is especially situational and could go either way.

When a crisis happens, a company would be involved with more than one of these conditions. Depending on the situation at the time, crisis management professionals would take the template and check what criteria the brand fulfills and which side it tends to lean on more.

Examples

When Strong Brand Loyalty Helps:

Blue Bell’s Listeria Crisis

In early 2015, U.S. ice cream maker Blue Bell announced several rounds of complicated recalls of its ice cream after listeria in its products infected five consumers and led to three deaths.

Although its crisis response was strongly criticized, Blue Bell’s strong loyalists remained highly tied with the brand. The beloved Southern ice cream maker made it through the summer without having any product on shelves. During the time, fans continued to engage with the company on social media.

In fact, Blue Bell’s fiercely loyal consumers were waiting in long lines outside stores when the company finally came back to the market.

Apple iPhone 4’s “AntennaGate”

Very soon after Apple released iPhone 4 on June 24, 2010, complaints about signal attenuation began to flood the web.

When faced with growing negative reviews, widespread criticism and potential lawsuits, Apple’s initial solution was to tell users to not hold their phones in certain way.

Critics argued that Apple’s crisis response broke all the rules: the company didn’t apologize immediately or take full responsibility. Despite all the negative publicity and critics, demand for iPhone 4 continued to exceed supply.

In the case of Blue Bell and iPhone 4, the brand was in the green more than in the red. Therefore, their strong brand loyalty helped the companies overcome the crisis.

When Strong Brand Loyalty Hurts:

The “New Coke” Launch

Thirty years ago, Coca-Cola made its worst mistake when, without warning, it abandoned its original formula and replaced it with “New Coke.”

Long-standing customers felt betrayed.

Some deserted the brand for its biggest competitor Pepsi.

Ultimately, Coke’s strong brand loyalty led to one of the company’s largest PR crises, driven by a fierce reaction from fans who believed Coke was neglecting them.

After three months of justifying the unilateral withdrawal of its beloved Coke, and insisting that customers would prefer the new Coke, Coca-Cola brought the original back as Coke Classic.

Susan G. Komen and Planned Parenthood

On January 31, 2012, the Susan G Komen Foundation announced its decision to stop funding Planned Parenthood.

The halt would affect breast cancer screening and treatment services — mostly provided to poor or uninsured women — at 19 of Planned Parenthood’s affiliates.

Within hours after the news broke, Komen was flooded by public outcry. During the next three days, the foundation saw significant lost in donation and the negative response it received was overwhelming.

After 72 hours of the initial decision, Komen Foundation announced that it would reverse the funding decision. But the reversal didn’t stop the damage.

Long-standing Komen supporters who felt hurt and betrayed refuse to forgive the organization. Both event participation and revenue of the nation’s best known cancer foundation continued to drop.

Volkswagen’s Emissions Scandal

In 2015, the U.S. Environmental Protection Agency (EPA) found that German automaker Volkswagen Group (Volkswagen) had installed software in a number of cars sold in the U.S. that would provide artificially positive results during emission tests.

Volkswagen later admitted that it had intentionally equipped its vehicles to cheat on emissions tests. For the first time in 13 years, Volkswagen’s sales in the U.S. declined 15% in November 2015.

Marketing and communication experts think that Volkswagen would be hard to forgive, especially by many of its loyal consumers.

The fact that the company voluntarily cheated on the public was worse than negligence or mistakes in testing procedure, which set itself apart from other auto recalls in the industry though some of them even linked to deaths.

Conclusion

The New Coke, Komen and Volkswagen crises saw far fewer conditions in the green compared to those in the red. Therefore strong brand loyalty in these cases created a backlash.

This model creates a shortcut for communication professionals to quickly evaluate their brand loyalty’s position and the likelihood that loyalty will help or hurt the organization navigate a crisis.

When a brand falls more into the green cells, instead of immediately pulling out everything, e.g. halting production or crafting the perfect apology, time and money could be better spent on gathering information and resources to fix the problem.

When a brand falls more into the red cells, the essence of response strategy should include gaining forgiveness from loyalists.

Perhaps more significant, the model can stimulate companies to take brand loyalty into serious consideration before making business decisions.

August 20, 2016/by Helio Fred Garcia

Jefferson Lives! Fourth of July Teachable Moment

Best Practices, Blog, Communication, Crisis Communication, Crisis Management, Framing, Human Rights, Language, Leadership, Politics, Power of Communication, Reputation, Strategy, Uncategorized, Worth Reading

by Helio Fred Garcia

To my Students: A Fourth of July teachable moment on framing — starting with why — and career management, on the 240th birthday of the United States of America.

On June 7, 1776, the Second Continental Congress, meeting in Philadelphia, voted to separate from England; our own Brexit.

It passed a resolution put forward by Richard Henry Lee of Virginia, declaring, in part: “These colonies are, and of right ought to be, free and independent states.”

The Declaration of Independence, by John Turnbull

Who Writes The First Draft?

On June 11 Congress named a committee, known as the Committee of Five, to write the announcement. That committee included John Adams of Massachusetts, Ben Franklin of Pennsylvania, Roger Sherman of Connecticut, Robert Livingston of New York, and Thomas Jefferson of Virginia.

The committee initially asked Adams to write the first draft. But Adams, 41, considered himself a statesman and thought the work beneath him. So he suggested that Jefferson, 33 and a rising star, take the first draft.

Writing the Declaration by JLG Ferris

According to the biography John Adams: A Life by John Ferling, Jefferson was confused by Adams’ suggestion:

“Jefferson asked, “Why will you not? You ought to do it.”
To which Adams responded, “I will not – reasons enough.”

That didn’t satisfy Jefferson, who insisted,

“What can be your reasons?”
And Adams responded, “Reason first, you are a Virginian, and a Virginian ought to appear at the head of this business. Reason second, I am obnoxious, suspected, and unpopular. You are very much otherwise. Reason third, you can write ten times better than I can.”

Adams may or may not have been sincere.

Jefferson yielded.

“Well,” said Jefferson, “if you are decided, I will do as well as I can.”
Adams concluded, “Very well. When you have drawn it up, we will have a meeting.””

There is no evidence that such a meeting took place. There is evidence that Franklin, then in his 70s, edited Jefferson’s draft carefully.

Start With WHY

So Jefferson took on the task. But instead of simply listing the grievances against the King, Jefferson, who knew a lot about persuasion, decided to start with WHY — First, with a meta-WHY, why a Declaration of Independence, as opposed to simply an account of the vote? And second, the WHY of separation.

First, WHY the Declaration: Jefferson wrote that in such circumstances,

“a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.”

A Decent Respect for the Opinions of Mankind

Think about that for a moment: A DECENT RESPECT for the opinions of mankind. That’s the foundation of public relations — and of all civil government. This usually-overlooked opening to the Declaration is in many ways as important as what follows. It creates accountability and sets a standard — what reasonable people would appropriately expect a responsible provisional government to do when it decides to leave.

Second, WHY the separation: First principle: All are equal. Second principle: Fundamental rights are life, liberty, and pursuit of happiness. Third principle: Government exists to secure these rights.

Move to HOW

And then the HOW: When government fails to do so, it is the right of the people to alter or abolish that government.

Heady stuff.

Of course, it was more aspirational than normative, as Lincoln pointed out 87 years later. We’re still trying to get it right.

Finishing the Draft

Draft of the Declaration, with Franklin’s and others’ edits

Jefferson’s draft was powerful but wordy. Franklin edited it; the Committee of Five submitted it; the Congress tweaked it more.

The Declaration was ratified on July 2, and published on July 4.

The Broadside Edition of the Declaration of Independence, published on July 5, 1776.

Note that of the 1,338 words of the Declaration, the first 1,180 are all about the WHY and the HOW.

The WHAT, the text of the actual resolution of the Congress, appears only in the last paragraph and consists of only 127 words:

“We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do.”

And the Declaration closes with the final 31 words:

“And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.”

Rivals and Friends

John Adams as the second President of the United States

Adams never quite got over missing the chance to get credit for the Declaration. He went on to become the first Vice President and second President; Jefferson to be the first Secretary of State and third President.

Thomas Jefferson as the third President of the United States

History continues to view Jefferson — with all his flaws and contradictions — more favorably than Adams.

The two were fierce political rivals until both left office; then they became fast friends, frequently corresponding with each other (as only former presidents can do).

But Adams continued to envy Jefferson.

And both died on the same day, exactly 50 years after the Declaration was published, on July 4, 1826, exactly 190 years ago today.

According to legend, Adams, on his deathbed and unaware that Jefferson had died several hours earlier, lamented that Jefferson would outlive him.

He uttered this deathbed regret:

“Jefferson Lives!”

Of course, he was right.

Below, for reference, the final version of the Declaration of Independence.

……………………………………..

IN CONGRESS, July 4, 1776.

The unanimous Declaration of the thirteen united States of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.–Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.
He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.
He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.
He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.
He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.
He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.
He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.
He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.
He has affected to render the Military independent of and superior to the Civil power.
He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
For Quartering large bodies of armed troops among us:
For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
For cutting off our Trade with all parts of the world:
For imposing Taxes on us without our Consent:
For depriving us in many cases, of the benefits of Trial by Jury:
For transporting us beyond Seas to be tried for pretended offences
For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:
For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:
For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
He has abdicated Government here, by declaring us out of his Protection and waging War against us.
He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.
He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our Brittish brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do

And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

July 4, 2016/by Helio Fred Garcia

Cross-Cultural Study of Corporate Apologies – GUEST BLOG BY Stella Danqing Zhao

Apology, Best Practices, Blog, China, Communication, Crisis Communication, Language, Uncategorized

Introduction by Iris Wenting Xue：

This is my second in a series of guest blogs featuring my recently-graduated capstone (thesis) advisees in New York University’s Master’s in Public Relations and Corporate Communication.

I myself was a guest-blogger when I graduated two years ago from the program. (See A 10-C Model for Apologies here.) And it is my great honor to become a Capstone advisor and contribute to the program.

In her capstone, Stella Zhao analyzed corporate apologies in terms of wording, tone and body language. She compared different apology styles in the U.S., China, and Japan and came up with customized recommendations. As she notes, apology is not only about communication but also about anthropology. You can read the entire capstone here.

…………………..

Stella Danqing Zhao

Through the Looking Glass:

A Cross-cultural Study on Proper Usages of Verbal and Nonverbal Elements in Corporate Apology Speeches – Guest Blog By Stella Danqing Zhao

My thesis is a study on different apology styles regarding wording, tone, and body language in the U.S., China, and Japan. The wording part mainly focused on IFIDs of each country, which means “Illocutionary Force Indicating Device”, also known in this case as the key apologetic words. The body language part focused on the eye contact, facial expression, gesture, posture, and also a particular way of apologizing – bowing.

The study contains two parts – study and survey. In the case study part, nine cases, three from each country, are analyzed to find the common apologetic words, tone, and body languages:

U.S.

Domino’s Pizza:

General Motors:

Blackberry:

China

2015 Shenzhen Landslide:

Mindy Quah:

Sixth Naphtha Cracking Plant:

Japan

Rikuentai Bus Company:

Tokyo Electric Power Company:

In the survey part, a survey was distributed and assembled using the survey software Qualtrics. Participants were first asked to answer a few questions on corporate apologies to see their general perceptions regarding wording, tone, and body language. After this part, they were shown two corporate public apology speech videos – one from Volkswagen, the other from Toshiba. To exclude the influence of participant’s knowledge of certain language, they were asked to focus only on the nonverbal part and answered a few questions regarding on the tone and the body langue of the two speakers.

Volkswagen:

Toshiba:

Conclusion

Based on the case studies and the survey, several similarities and differences were found between the perspectives of the audiences from those three countries. Therefore, we can have some recommendations on different apology styles in each country.

U.S.

In the U.S., the most common IFIDs are “sorry” and “apologize”. According to the survey, people believe that the word “apologize” is more effective than the word “sorry”, but both of them can be used based on different situation. When using apologetic words, adverbs such as “sincerely” can be used to strengthen the tone. Honorific words are not extremely necessary and the speech can be informal to some degree, but it should still be written clearly and express regrets.

A consensus between the three countries is that the tone of an apology speech should be regretful, humble, and empathetic. However, in the U.S., people can accept a more firm, positive, and confident apology. It’s important to show your audience that you have the determination to fix the problem.

As to the body language, it’s important to make direct eye contact in the U.S. Avoiding direct eye contact can be seen as hiding and dishonest. The facial expression should be serious, and proper gestures can be applied. The posture should be formal but with natural movements instead of standing stiffly. Bowing is not recommended in the U.S. because it may be seen as an overreaction.

China.

In China the common IFID is the derivatives of the word “qian (歉)” [In English: apology] such as “bao qian (抱歉)” [In English: apologize] and “dao qian (道歉)” [In English: apology/apologize] . “dui bu qi (对不起)” [In English: I am sorry] is also a common apologetic word but it’s less used in a formal corporate apology. Adverbs such as “cheng ken (诚恳)” [In English: sincerely] and “fei chang (非常)” [In English: very] can be used to show sincerity. One should also address the audiences with “nin (您)” [In English: you, but in a very respectful way, like “Your Majesty” rather than “Hey, you”], which is the honorific form of “you” in Chinese. The speech should be written in a formal style.

Besides being regretful, humble and empathetic, the tone of the apology speech should let people feel that you are somehow ashamed for the wrongdoing, which shows that you realized what you did was improper. It should also be firm without hesitation.

In China, direct eye contact is also welcomed. People can accept having a modest smile on their face, which means the facial expression doesn’t need to be blank or stiff. Proper gestures can be applied, and the posture should be as formal as possible. Although bowing is not required in apology speeches in China, it is recommended to show more sincerity.

Japan.

In Japan, there are strict requirements for the choice of apologetic words. Using informal IFIDs such as “sumimasen(すみません)” [In English: Excuse me] and “gomen nasai(ごめんなさい)” [In English: apologize in daily setting] can be seen as a mistake. IFIDs such as “moushiwage gozaimasen (申し訳ございません)” [In English: apologize in professional setting] and “owabi shimasu (お詫びします)” [In English: apologize in professional setting] are recommended. One can use multiple apologetic words in one apology to make it stronger. Using adverbs such as “fukaku (深く)” [In English: deeply] and “hontoni (本当に)” [In English: truly] are also a good way to show sincerity. Honorific form of the words is required in a formal apology.

In Japan, the tone of the apology speech should be more “negative”, meaning it should be more sad, regretted other than positive and confident. It’s better to show you remorse for bringing other people trouble.

Direct eye contact is not recommended when apologizing to Japanese people. Lowering the head can show your regrets and humble. A smile is strongly prohibited. Although in the survey the respondents didn’t disagree with using gestures, they are seldom found in previous apology speeches. Usually, Japanese people stand in a very formal posture with their hands beside their body. Bowing is required and can be applied multiple times according to different situations.

		U.S.	China	Japan
Wording	IFID	“Apologize”/”Sorry”	Derivatives of “qian” (歉)	“moushiwage gozaimasen” (申し訳ございません) “owabi shimasu” (お詫びします)
	Adverb	Sincerely	“fei chang” (非常) “cheng ken” (诚恳)	“hukaku” (深く) “hontoni” (本当に)
	Honorific Form	✖	✔	✔✔

Tone

Regret

Humble

Empathetic

Positive

Confident

Firm

Ashamed

Sad

Ashamed

Body Language	Eye contact	✔✔	✔	✖
	Smile	✖	✔	✖
	Gesture	Apply properly
	Posture	Somewhat natural	Formal	Formal
	Bow	✖	✔	✔✔

The table above briefly summarizes how wording, tone, and body language shape public perceptions of corporate apologies, and how apology style differs in U.S., China and Japan. Reflecting on a better understanding of how stakeholders think and feel can help a leader, and those who advise the leader, to more likely craft an apology that will work.

June 8, 2016/by Logos Consulting Group

Communication in E – Commerce: Guest Blog by Erna Li

Best Practices, Blog, China, Communication, Social Media, Strategy, Uncategorized

Introduction by Iris Wenting Xue：

This is my first in a series of guest blogs featuring my recently-graduated capstone (thesis) advisees in New York University’s Master’s in Public Relations and Corporate Communication.

In her capstone, Erna Li conducted analysis on the China-born e-commerce company Alibaba and compared it to American e-commerce company Amazon in terms of social media and business model aspects to learn best practices. She focused on the challenge of building messages that resonate as the companies expand from just domestic online shopping platforms to global online retailers. You can read the entire capstone here.

Communication in E – Commerce: Guest Blog by Erna Li

Online shopping in a cash-based country could be a dream to a teenager. I still remember the excitement of winning the first bid for a backpack on eBay at my senior high school in China. After shopping online for over ten years and learning public relations/communication for six years, I realized how important it will be if e-commerce companies could strategically convey messages to their target audiences. They need to send out the right messages at the right time via an appropriate channel.

We assumed that communication would be easy for of e-commerce companies compared to other industries, because e-commerce is online, global, and almost everywhere. However, successful e-commerce companies face unexpected challenges when they try to expand to other territories. They need strategic communication to overcome challenges that occur in international environments.

Alibaba Case Study: Born in China, Created for the World

Alibaba is an enormous China-founded e-commerce company. This company powers 80% of online commerce in China. From flight ticket reservation to fresh fruit delivery, consumers are able to find most kinds of services they need. At the end of December 2014, Alibaba had almost 334 million active buyers on its website. Such success would not have been possible without a social media and public relations campaign.

Alibaba Corporate Communication Strategy: Domestic Shopping Day to Global Shipping Festival

Each November 11^th since 2009, Alibaba has launched a domestic online shopping celebration campaign. The date is well known in China as Single’s Day — the date’s number eleven represents people who are single. Initially, the idea was for singles to celebrate their freedom and independence. Now, it is also an excuse to shop. People are more than welcomed to shop online whether or not they are single.

The above image is a screenshot of the Alibaba website. It says that all merchandise is available for at least a 50% discount on November 11^th. Every year the discount theme is similar. Before 2014, Alibaba’s corporate message was about the discount and coupons. After Alibaba went through 2014 IPO, Alibaba changed its message and emphasized its global shipping services. The target audience is mostly the Chinese who live overseas. That is to say, Alibaba upgraded its shipping from purely domestic to global. However, Alibaba’s website is not available in English, which could limit participation of the international buyers in the Global Shipping Festival.

Best Practice

(http://fortune.com/2015/11/11/alibaba-singlesday-record-2015/)

With their successful public relations and social media campaign, Singles Day in 2015 reached e-commerce sales to $9.8 billion. The chart above shows how Single Day’s revenue in China was more than all sales volume during the U.S. shopping holidays in 2014.

Challenge: Stock Decline

(http://www.barrons.com/articles/alibaba-why-it-could-fall-50-further-1442036618)

Barron’s, an American weekly stock market-focused newspaper, posted an analysis “A Hot Stock Turns Cold.” As the first chart shows, Alibaba’s stock has kept dropping since December 2015. The price reached its peak in November, which also suggests that Global Shipping Day campaign remains an important date for the company.

Situation analysis – Map impact and likelihood

I have learned the following chart from the crisis management perspective during the crisis communication course in 2015. Since then I tried to apply it in other business communication settings.

The above chart says that the most likely/ already happened is the stock price decline. The major impact of dropping stock is investment lost and negative influence on financial performance. The possible critical impact is that Alibaba might lose some investors. The major possible impact is that Alibaba’s credibility is criticized and questioned. Wall Street Journal, BBC, Fortune, Reuters and other media outlets might state the controversy from different angles. The critical remote impact on Alibaba is that the declining stock could cause public concerns and shareholders’ disappointment.

In Alibaba’s case, there are two main reasons behind the scene that led to the stock slide.

Alibaba has strong domestic and overseas competitors. JD.com is a Chinese e-commerce company based in Beijing. It is one of the largest B2C online retailers. Another strong oversea competitor is Amazon. As Amazon has been in the e-commerce industry for decades, it has stable customer resources and deep understanding of the market. Even some of the Alibaba’s business models are learned from Amazon.
A controversy regarding potentially counterfeit products sold through Alibaba has led to negative visibility and stock market declines.

May 25, 2016/by Logos Consulting Group

ClassPass, Weight Watchers, & Organizational Culture: Who Are Your People?

Blog, Communication, Leadership

By Kristin Johnson

I’ve been consumed by organizational and corporate culture this week. It started at 8 a.m. on Monday, when I served on a breakfast panel at New York University with three other academic instructors from the School of Professional Studies Division of Programs in Business. The topic, “Organizational Culture: The Secrets to Success,” launched a rich conversation, including what it means to build culture and how culture influences the success of an organization.

Attracting more than 40 attendees (early on a Monday no less!) and fielding questions beyond our time limit — I considered the discussion a success.

That was, until 10 a.m. on Wednesday, when I received an email from ClassPass, my fitness ~~obsession~~ subscription service, announcing jacked up rates, from $125 to $190 a month in the NYC market. The hike came less than a year after rates rose from $99 to $125 a month.

Offense Taken

ClassPass’ 48-percent-within-less-than-a-year rate hike, which came without any explanation, left me confused, angry, and dare I say…hurt? I fired up Twitter and Facebook to find #classpass trending on both platforms. There was a collective total ~~freak-out~~ outpouring of emotion.

Why? WHY? WHY!!!!???? That was the question on all ClassPass members’ minds. Presumably, the “why” was a business decision, but all I could think of was, “what’s in it for me?” In fact, the new rate increase will have members paying more money for fewer classes. I took a deep breath and checked the math. Okay, I’d still be getting a reasonable discount on gyms and fitness studios compared to regular rates, but it didn’t make me feel much better and based on social media’s response, other members weren’t happy either.

The passionate and personal “why,” I’ve concluded, refers less to bemoaning why one must now choose between groceries or fitness (okay, bourgeois drama), and more to why did ClassPass forsake me, in an “injustice of it all” spirit. Members, many of whom were early adopters, are hurt. They supported, nurtured, and advocated for a company that in a mere five years went from a pea of an idea to a company with more than $100 million in funding. Appreciating that ClassPass has to build sustainable profit, members are still left with the same product for a lot more money, feeling abandoned in the bait-and-switch dust of start-up success.

If I think back to the panel discussion from Monday on organizational culture, I realized we omitted an important community in our discussion, as ClassPass did in its Wednesday announcement: external culture.

Organizational Culture, Looking Outside-In

So often, the term “corporate culture” or “organizational culture” is considered an inside-out term. People often think of team building and corporate perks within a company:

“Hey, we’re Google and we have slides. Look at the creative culture we cultivate!“

“Bring your dog to work at Zynga! We have a rooftop dog park, for when you’re not using the indoor bike park, of course. We are fun!”

While culture has always been unwieldy, it’s generally contained within the organization. With the sharing economy and business aggregators, that is changing.

Today, many companies — especially tech start-ups and disruptors — rely on the active and enthusiastic participation of their customer base to build not only revenue, but a reputation and an identity. A company’s culture can be one of its strongest assets, or one of its greatest liabilities — and external culture needs to be considered.

Customers are creating a culture around companies, and that culture can power corporate strategy and identity. If the external culture is ignored or aggrieved, then the company may suffer wrath and fury in an external cultural revolution.

An example of a company nurturing external culture — or doing it well — is Weight Watchers International.

In January, the company launched it’s own social media platform, Connect, accessible within the mobile app that members use to track food, share ideas, and view weight loss progress. The app is barely five months old, but already a powerful tool for Weight Watchers, which is gaining valuable insights from members as they share successes, struggles, hopes, and encouragement with each other united in the pursuit of weight loss. Connect has been an overwhelmingly judgment-free and kindness-focused platform. Members share #NSVs, or “non-scale victories,” that include wearing shorts, riding a bike, and weighing less than the fake (low) weight on a driver’s license.

Weight Watchers recognizes that Connect participants are more than “users” or even “external stakeholders.” People participating are now a valued community of the Weight Watchers company, as a whole. Member commitment and loyalty is deeper than “just” a customer — they are part of what make up the culture, in this case external. At Weight Watchers, this added element of culture reveals and inspires new programs and opportunities, including “Glowments,” a type of #NSV moment that makes one beam from within. (It’s a thing.)

Organizational Culture, Explained & Expanded

I started my week thinking that my panel cohorts and I nailed “organization culture,” but we overlooked the importance of external culture. It wasn’t until Wednesday, when my fellow ClassPass members and I got blindsided with rate hikes, did it dawn on me what an omission it was to overlook external corporate culture. Brand ambassadors, followers, enthusiasts, groupies, diehards — whatever you want to call them — the external culture matters. How a company chooses to harness the culture — or renounce it — is a strategic decision that could have far reaching impacts.

This piece can also be found on Medium.com.

April 29, 2016/by Logos Consulting Group