You thought I flew the coop, didn't you? You can't get rid of me that easily. The writer's block is gone. The head is free and clear for lots of new posts and topics. And true to previous form, I am going to throw some wrinkles into the mix.
Meanwhile, I want to touch on something from a few months ago, as it requires further examination. Go through the annals of "The Spin" and you'll find a January 2012 post about apologies.
Witness the following news from a PR agency and its client. Maybe I'm old-fashioned, but I have a hard time making news around murder and mutilation. Yet that was the impetus for one company to ask its PR counselors to issue a release on background security checks. It would be easy for me to critique the agency for even letting this client release the "news." In fact, what has me twisting in the wind is the apology that came from the company's top dog.
Pop quiz: In this story, the president/CEO apologized for the release "if anyone thought it was in poor taste... but if I was renting out my basement, I'd want to know who I was renting it to." Which words have me riled up?
A. "If anyone thought"
B. "Poor taste"
D. All of the above
The answer is not the obvious choice. The easy answer is "D." If you chose "C," here's your prize.
Apologizing with "but" implies anyone with a different opinion is wrong. What's more, the executive tap dances around the issue, trying to substantiate the reason for committing the actions discussed in the release. His statements come off as attempting to save his company's reputation, not to mention his own hide. Yet these are too little, too late.
An apology's after-effects ripple broadly, but we investors often focus on stock price and company trust. Witness the decline of the stock price of Chesapeake Energy (NYSE: CHK) after its CEO talked about his "distractions." I have been following the stock price and investor sentiment since the revelation that he ran a hedge fund in addition to being a CEO. Except for glimmers of sunshine that came out in response to Carl Icahn looking for a change in board seats, the company has been in decline. Now the company has to address the distractions on top of addressing a declining stock price. Fun, huh?
Both CEOs would be wise to review the following Twitter feed and Adweek story about an apology that turned out really well. If you're from the UK or follow the grocery business at all, you have probably heard of Sainsbury's. I first heard of this company a few months back when Adweek ran a story about how a three-year-old got the ball rolling on a product's name change. Fast forward to May, and a blogger complains about a product sold in the store and posts it on Twitter. Not only did Sainsbury's apologize for the act, but it also provided a phone number, encouraging the blogger to call and share his concerns.
Anyone see the parallels? Sainsbury's has a strategy in place to respond to feedback that permeates all of its consumer functions -- good or bad. In each situation, the company took the bull by the horns, listened to its consumer base, acted swiftly to generate the right kind of support, and reacted favorably. What's more -- it got bonus points because it transformed its apology into a good joke, unlike the security company CEO who thought murder was funny.
The bottom line -- if you think that words don't affect our portfolios, think again. Better yet, think before you speak or say. And above all else, if you're going to joke about something, you better ask someone if it's funny first.