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December 14, 2005

Do Companies Start Blogging Only When They're in Trouble?

My last post offered a first-year report card on General Motors' blogging effort. In that piece, GM's director of new media Michael Wiley told me quite openly that it was the company's desire to overcome its serious image problems that was the prime motivator behind its blogging strategy.

"We had to do something to humanize the company and create a fresh image for GM," Wiley told me. And blogging was the solution they came up with.

All of which raises an interesting question: Do most companies tend to start blogging, as General Motors did, only when they're in trouble? In other words, is blogging a form of "tough love" for companies in crisis?

To be sure, surveys of companies that blog reveal a variety of motivations behind their efforts. But given that only 3 percent of Fortune 500 firms even have a public blog in the first place -- a clear indicator of the hesitancy and fear which still hamstring corporate acceptance of blogging -- it's not clear how much we could learn from such surveys anyway.

That said, it's certainly not difficult to find companies that have openly adopted blogging as an antidote to either poor corporate performance in general or ineffective public relations and marketing communications efforts in particular.

"When European competitor Airbus edged Boeing in passenger plane sales last year, the U.S. aircraft manufacturer decided to take its pitch to a growing audience in the blogosphere," noted the Anchorage Daily News recently. The blog, which generates 16,000 hits per month, is written by Boeing marketing vice president Randy Baseler. According to a spokesman for Boeing, "If you're a customer deciding between an Airbus product and a Boeing product, maybe [Randy's Journal, as the blog is called] tips you a little in your decision making."

And then there's Microsoft -- or more to the point, Robert Scoble, the poster boy for corporate-sanctioned employee blogging. Originally, Scoble worked at NEC, where he used his blog to resolve customer complaints and get product feedback. According to the Economist, Scoble's blogging work caught the attention of Lenn Pryor, Microsoft's "director of platform evangelism," who thought Scoble might be able to help Microsoft with its image problems.

Pryor, it turns out, used to be afraid of flying, but he discovered that by listening to the uncensored pilot and control tower communications over channel 9 at his airplane seat, "the irrational nature of my fear started to fade." Pryor wondered if, by listening to the honest, uncensored communications of Microsoft insiders, the supposedly "irrational" fears of Microsoft among many developers and customers might similarly be eased.

So Pryor hired Scoble to serve as the reassuring "pilot" of Microsoft's blogging effort. Three years later, it appears that Scoble, through candid blog postings that are sometimes quite critical of his new bosses, has accomplished what literally hundreds of millions of dollars in Microsoft image advertising and public relations initiatives over the last ten years could not -- i.e., the humanizing of a company once reviled as a monopolistic bully.

As the Economist put it:

"He has ... succeeded where small armies of more conventional public-relations types have been failing abjectly for years: he has made Microsoft appear marginally but noticeably less evil to the outside world, and especially to the independent software developers that are his core audience."

Would Microsoft even have hired Scoble had its own traditional public relations efforts not been so ineffective? Scoble has no way of knowing the answer to that question. But he did tell me that "being on top and being fat and happy certainly does seem to keep some companies from doing initiatives like blogging. It's hard to change when what you're doing seems to be working fine."

Not everyone believes that most companies tend to start blogging only when they're in trouble, of course. Executive blogger and Sun Microsystems president Jonathan Schwartz, for example, dismisses the idea that there is any connection between, say, a company's share price and its decision to start blogging. Instead, Schwartz insists, he and others at Sun started blogging simply because it allows them to communicate more effectively with the firm's customers and developers.

"Don't make blogging into something dark or mysterious," Schwartz told me. "It's just a way to communicate with more authenticity and transparency. In fact, ten years from now, probably all effective CEOs will have a blog. I really believe that."

Whatever the reasons why companies start to blog, one thing is certainly clear: it is not for the faint of heart. Indeed, blogging presents major challenges to the traditional ways companies manage not only their public affairs but also their marketing and product development functions -- not the least being that it gives customers a far more powerful and direct voice in enterprise decision-making than has ever been the case before.

But in a marketplace in which 90 percent of new products fail because of what R&D; managers call "an inadequate understanding of the voice of the customer" -- and in which, according to a new study by Intelliseek, consumers trust recommendations from bloggers and their own peers far more than they do either advertising or media reportage -- it would seem that most companies could benefit mightily from a stronger customer voice in their affairs.

Certainly that's the view at GM, Microsoft, and Boeing, who all discovered that blogging's "tough love" was just the remedy for what ailed them.

December 12, 2005

GM's Blogging Experiment -- A First Year Report Card

A little over one year ago, Michael Wiley, the director of new media at General Motors, decided he had to do something to change the company's sclerotic image as a tired relic of the industrial age that had lost touch with American car buyers.

"We had to do something to humanize the company and create a fresh image for GM," he told me. "I knew that a few quick PR hits wouldn't do the job -- that it would take something like a blog to really shake things up. But I could see the carcasses all over the place of companies that had tried to do gimmick blogs. So I was insistent that our blog had to develop a real conversation with our customers. That was the only way it would do any good."

So Wiley brought his proposal for a blog to GM management, and got the go-ahead -- initially for a small-block engine blog for enthusiasts of the company's 1960s muscle cars (which was eventually discontinued in October of 2005), and then for the launch on January 5, 2005 of a GM Fastlane blog -- one of corporate America's first executive blogs -- to be written by company vice chairman and product guru Bob Lutz.

Almost immediately, Lutz's blog turned into a free-for-all between the company and its customers. Typical was a February 2 posting by Lutz in which he addressed this reader complaint about the quality of GM vehicles:

"I'm still looking for an excuse to ‘buy American,’ after switching to Japanese vehicles 15 years ago. With all the talent and resources that GM has, why can't every GM division have at least one vehicle that is best in class for design, quality and performance? AND outsells the Japanese competition?"

In response, Lutz insisted that GM is "trying to live down a reputation that was probably at one time deserved, but is no longer justified." He went on to cite favorable J.D. Power and Consumer Reports quality surveys for several GM brands, and then offered this challenge to his readers: "Don't take my word on any of this. Check the data, and go make comparison drives."

Lutz's post that day generated a phenomenal 122 comments, roughly 40 percent of them negative. Typical was this response from Nicholas Weaver: "If GM wants to dispel [its] bad reliability reputation, then it's going to have to beat the Japanese brand and do it for several years." Noted another critic named Susan: "GM needs to work on interior quality and refinement. The panel gaps on the hugely expensive Cadillac Escalade [are] just unacceptable."

But there were also many positive comments, including this one from Diego Rodriguez, a product design and marketing expert who operates the popular MetaCool blog:

"Quality is an international language, and no one firm can claim a lock on it just because they're Japanese or German or whatever. The proof is in the pudding, and I just might have to go out and test drive a Buick. There, I said it."

Interestingly, a number of readers were grateful simply to have someone -- anyone! -- in authority at GM listening to customer complaints and suggestions:

"Bob, thanks for putting up this weblog. It's [great] to be able to give you feedback." Added reader Jeff Crew: "As a car enthusiast, do you know how exciting it is to have a peak 'behind the curtain'? This is absolutely outstanding!"

Now, after a year into GM's blogging experiment, Wiley told me he believes it's been a resounding success. To be sure, the company remains in a deep financial crisis, as its latest earnings reports and layoff announcements demonstrate. But to Wiley, who never expected blogging -- or, indeed, any experiment in new communications strategy -- to solve the company's sales and earnings challenges, the results of the first year of blogging are clear.

"For one thing, some of the suggestions from readers have made it onto the desks of GM designers, which I think in the long run will improve the quality and appeal of our vehicles," Wiley explains. "But beyond that, I do think that there is less of a tendency to call GM a dinosaur relic lately. In fact, the Business Week cover story on blogging [last May] even referred to us as 'surprisingly nimble.'"

Bottom line? "While it is difficult to pin down a quantum shift," says Wiley, "I feel confident that we have challenged the tired old stereotypes about GM."

I'd have to agree. And I might add that GM seems to have done everything right. GM's chief blogger (company vice-chairman Lutz) spoke in an honest and personal voice. He kept the PR department away from the blog's content. And the blog was equally open to both praise and criticism -- in other words, it was an authentic exchange between the company and its customers.

I'll wager that GM's more honest and intimate relationship with key customers will prove to be a formidable advantage in the company's efforts to surmount its current market challenges.

December 07, 2005

1,000 Days in Iraq Versus World War 2

To commemorate Japan's sneak attack on Pearl Harbor on December 7th, 1941, conservative bloggers are bemoaning the fact that -- in their view -- the American public (and especially the American media) doesn't have the stomach to fight a long war anymore. Typical was this comment:

As soon as it became apparent that [Iraq] wasn't a war that could be fought and won overnight, our society of "instant gratification" became nonplussed. Support for the war waned, and Hollywood and the mainstream liberal media took it upon themselves to launch a NEW attack on America...an attack of words, designed to undermine the war effort and the administration of our President.

Instead of blaming the people, perhaps these pro-war bloggers should consider that it's the strategic and tactical incompetence of the Bush administration that's the real cause of the quagmire of Iraq.

As my pal Dick Haggart of Anchorage -- who wore a "No Hard Feelings" tee-shirt to lunch at Pete's Sushi Spot today --put it, Do the math!

He notes that December 7, 2005 marks the 993rd day since we invaded Iraq. In that time, we've organized a couple of elections. But the insurgency is deadlier than ever, sectarian chaos is growing worse by the day, basic services and oil production are at lower levels than before the war, the Iraqi army which is supposed to stand in for us is a joke (according to articles in the military's own newspaper, Stars and Stripes), and we seem to be no closer to victory -- i.e., a stable democratic Iraq -- than when we began this mis-adventure.

By comparison, 993 days after Japan put most of the Pacific Fleet on the bottom of Pearl Harbor, we had leap-frogged two-thirds of the way back across the Pacific, gutted Japanese naval and air power, were preparing to invade the Phillipines and Iwo Jima, had run the Germans out of North Africa, Sicily, and half of Italy, had pulled off the greatest seaborne invasion in world history by landing in Normandy on D-Day, and had already liberated most of France. Meanwhile, our Soviet allies, pushing from the East, had destroyed several German armies and were already closing in on the Third Reich's eastern border.

In other words, the war was basically won, and it was just a matter of time before our enemies were finally crushed and forced to surrender.

So instead of mouthing platitudes about "staying the course," perhaps the administration's supporters should ask themselves why the United States could accomplish so much in less than 1,000 days against the greatest military and sea powers of World War 2 -- Germany and Japan -- yet can't seem to make any significant headway against a third world rebel force that doesn't own even a single tank, ship or airplane.

The answer, of course, lies in Bush's fatally-flawed war on terror policy. We invaded the wrong target, we fractured our own alliances in doing so, we turned vast sectors of the world's population against us, we refuse to even supply our own troops with the proper equipment, translators, etc., and we've turned the country into a factory for the mass production of suicide bombers.

Way to go, Bush!

The truth is, the White House botched it. And the polls show people know it.

December 05, 2005

Don't Mess With the Blogosphere!

The business world still does not get it.

The days are over when a business could market a crappy product or treat their customers like marks and assume that the worst that would happen is that they get a few angry letters they could then just dump in the round file.

Thanks to blogging, the customers can now hit back -- big time!

The latest example comes from a blogger who had a bad experience with PriceRitePhoto.com, one of those ubiquitous online electronics retailers. As reported by Shankar Gupta of Media Post Publications reported:

48 hours after "Thomas Hawk"--a pseudonymous tech and photography blogger based in San Francisco--posted a nightmare tale of hard sells, threats of legal action, endless delays, and runarounds, PriceRitePhoto.com has found its Web site in shambles, and its listings removed from prominent shopping aggregators like PriceGrabber.com and Yahoo! Shopping.

I don't doubt "Thomas Hawk's" complaints are accurate, because I experienced the very same unscrupulous "up-sell" techniques followed by "I'm sorry we're out of stock" from six (count 'em, 6) online retailers when I recently tried to buy a new camcorder without all the extra batteries, lenses, etc.

Anyway, Hawk's story, which he posted on his Digital Connection blog, was seen by 125,000 readers, some of whom apparently took swift vigilante action. Reports Gupta:

Howard Baker, a manager with PriceRitePhoto.com, said the business had suffered "millions of dollars" worth of damages in the last two days, apparently at the hands of consumer vigilantes who had read the Digital Connection post.

"In the last couple of days there was one disgruntled customer that posted a blog that caused thousands of people to come out of the woodwork and jam our Web site," said Baker--citing viruses, denial-of-service attacks, and thousands of prank calls. "We're talking to our attorneys this afternoon, and will probably be taking legal action."

On second thought, maybe not. According to Gupta, PriceRitePhoto.com's owner, Ed Lopez, later posted this apologetic email on the site:

"On behalf of Priceritephoto I would like to sincerely apologize for the negative experience that you have experienced with our company," the e-mail read. "We are doing a comprehensive review of our company's procedures to ensure that something like this never occurs."

The Kryptonite fiasco. Dell Hell. And now PriceRitePhoto.com. Oh yes, and there's also the saga of Circuit City false advertising and customer abuse, also reported on the gadget blog Gizmodo.

More proof that blogging is "tough love" for companies that need to change their ways. How many more battered and bloody companies will have to litter the corporate landscape before business wakes up to the new, customer-empowered marketplace we're living in?

December 02, 2005

Yes, But Can They Shoot Straight?

President Bush keeps promising us that, "As the Iraqi Army stands up, we will stand down."

But if a report this week in Stars and Stripes, the official newspaper of the U.S. military, is to be believed, we're not going to be "standing down" until a good while after hell freezes over. Here's the lead paragraph from the Stars and Stripes article:

HAWIJA, Iraq — Despite having spent a year in the Iraqi army, Pvt. Juma Ali Khalaf, who says he does not know how to read or write, has never been formally taught how to fire his AK-47, which he carries daily in his job as a checkpoint guard in northern Iraq.

The 21-year-old Sunni Arab soldier, who says he joined the army for one reason — “I need the money” — had a chance to learn basic soldiering skills this month during a weeklong basic training crash course taught by members of the 1st Battalion, 327th Infantry Regiment, 101st Airborne Division of Fort Campbell, Ky.

But wait, it gets worse. The one week training course, which is held on the grounds of Forward Operating Base McHenry, is supposed to prepare these Iraqi troops to fight in what Stars and Stripes concedes is "one of northern Iraq’s most active insurgent areas." Unfvortunately, the results, noted the article, were not exactly encouraging:

Despite rosy predictions, the first group’s initial day of training got off to a shaky start. The small group of soldiers who showed up Saturday morning — originally they numbered 33, but two showed up five hours late — were scantily equipped for the mission. Between them, they carried six helmets. One complained that his boots did not fit. Others made a litany of requests for basic equipment.

The American trainers tried their best to mold these recruits into warriors capable of taking on hardened Jihadist fighters. However, as the Stars and Stripes piece noted:

Just an hour into shooting practice, a group of soldiers retreated to a nearby berm and put down their weapons, saying they did not want to continue.

But no matter. So as not to conflict with Pentagon and White House claims that over 200,000 Iraqi soldiers have been trained and equipped, all 35 of these Iraqi troops were deemed "ready for action" and graduated with full honors at the end of the training course.

Well, actually, the training was shortened to only five days, presumably because they couldn't keep the guys from wandering off any longer than that.

Corporate America Still Schizo About Blogging

What's a poor corporate executive to do?

First Business Week ran a highly-favorable cover story entitled "Blogs Will Change Your Business." Their advice: "Your customers and rivals are figuring blogs out. Our advice: Catch up ... or catch you later."

Then Forbes countered with a surprisingly-histrionic cover story entitled "Attack of the Blogs." Their advice? Be prepared to fight back, because blogs can "destroy brands and wreck lives."

Now, reports Jane Genova, Harvard Business School has weighed in with its endorsement (albeit with caveats) of corporate blogging. The smartest advice from Harvard? They quote Debbie Weil: "Don't let the PR department write your blogs. Bloggers will sniff it out, and when they do, you will lose all credibility."

Why all this schizoid corporate hesitancy about blogging? It's because blogging really isn't for the faint of heart or the control freak. In fact, blogging forces companies to throw out many of the traditional ways they have managed not only their public affairs but their marketing and product development functions as well -- not least by giving customers a far more powerful and direct voice in enterprise decision-making than has ever been the case before.

That's enough to make any CEO reach for his or her anxiety meds.