Houston Rockets general manager Daryl Morey apologized on Twitter over a now-deleted tweet that spoke in support of Hong Kong protesters. Dean Crutchfield, CEO of crisis advisory firm Crutchfield and Partners, and CNBC’s Eric Chemi join the “Power Lunch” team to discuss. Here’s the link.
When major corporations have done something to anger Chinese authorities in recent years, the playbook has called for one thing: an apology…
“Dean Crutchfield, CEO of the crisis management firm Crutchfield + Partners, said Morey’s tweet, well-intentioned as it was, could cost the NBA billions. He wondered if a parting of the ways between Morey and the Rockets would appease China.
“You need to fire him and you need to fire him fast,” Crutchfield said. “China needs a statement, and for him to still be in his job is remarkable. I think Silver did a remarkable job with his statement, but this is a senior official, well aware of the importance of the Chinese market. One man, one tweet.” Here’s a link to the article.
“Agency experts, including a former communications executive with the league, say its initial public response inadvertently juiced the crisis….
With that in mind, Dean Crutchfield, CEO of Crutchfield + Partners, says the NBA should have exercised another option: dismiss Morey. Crutchfield says other employers would find rogue commentary of a sensitive geopolitical nature grounds for termination, especially if it was about a critical and growing geographic market, regardless of how well-meaning the message.
“If a senior executive and important representative of Apple came out with a remark like that about their most successful business unit, that executive wouldn’t be there anymore. It simply wouldn’t be tolerated in a corporate environment,” states Crutchfield. “It was one man, one tweet; they should have fired him and fired him fast.”
If they had, instead of making a statement about democracy and free speech, the NBA would have addressed business protocols and guidelines in relation to social media.
“The statement would read something like, ‘This is not how our people behave on social media, uncontrolled and with no regard for their professional responsibility. His personal opinion should have been kept to himself given the platform he has being part of this organization,’” says Crutchfield.
Financial Times reports on a new perspective on NBA v. China spat…Few western companies have more at stake than Nike in the fallout from an American basketball executive’s tweet about Hong Kong.
Here’s a link to the article. My POV is that “despite demands from the likes of Mr Rubio, he would advise the company to stay quiet. “Nike didn’t create this war,” he said. “Any crisis manager would say the same: avoid, avoid, avoid.” The episode could yet work to the company’s advantage, he added. “If they play it right, they’re going to sell a lot more merchandise.”
“Being less serious — and less ostentatious — is a smart move for Gillette, which turned consumers off with decades of marketing aimed at making men feel obligated to buy its razors. The category has been dominated by inadequacy marketing, with things like ‘The best a man can get,” Gillette’s tagline. The Dollar Shave Club and Harry’s come at it with something fun and innovative. The “Welcome Back” concept creates some curiosity, and that’s what it’s about. The question is: Is it too late?”
The greatest brands in the world have a palpable sense of mission about them. The United States of America gave the world a chance to be different. Its soul is radical. It’s history full on. America has always been a lightening rod, a country that goes charging into the fray as a liberator, a savior, and a protector. Does a divisive country weaken Brand USAs image abroad?
From President-elect Trump and street protests to New Balance sneakers alight and a red-hot stock market is Brand USA facing a chronic and debilitating decline as pundits suggest? Will Trump’s bold, arrogant and cocksure rise to the top job, his rhetoric, and choice of cabinet magnify the issue of our international role and standing? Will it be a leg up, a close shave or a deep cut?
Inside Brand USA there’s a dysfunctional dynamic. Today the country’s divided it lacks cohesion and confuses the world. Right now there’s no one brand that America can rally behind because there is tension between the extreme poles of right and left. The self-denigration inside America, the frustration, lack of self-worth and self-esteem is seen by the world and affects people’s perception. For many onlookers Trump supporters were about making America white again, moving away from the “United Colors of America”. An America that embraces everyone to an America that’s isolationist is a starkly different place.
A country’s wealth is not measured by what it has, but whom it helps with it. Because of this, the world admires America, but many ask what will be the basis of America’s claim to moral superiority going forward. Our greatness has not come from winning, but from leadership with common values and shared responsibilities: power is not a right it’s a responsibility. America had a clear position
in WW2, the cold war, Regan and Obama. As Tocqueville said when he traveled the country, “America is great because it is good and it is not great when it’s not good”.
A thought is as real as an IED. Might the world be concerned they’re going to see an imperial mission for America with Trump at the helm? A brand doesn’t live by itself so for Brand USA to assert that it has no interest other than self-interest is unsustainable in the modern world and our role within it. That’s the equivalent of Trump saying he has no interest other than being elected.
Through all the mud slinging, speech giving and handshakes the burning issue for Brand USA is what is America’s true motive going to be as it handles multiple, urgent and important short and long-term crises simultaneously while formulating coherent long-term strategies? For now, political hysteria reigns, befuddled, malevolent and irrational, but just as things never turn out as Presidents promise, they rarely turn out as badly as pundits warn. Keep flying high America.
What’s the Point? The overriding problem with the vast majority of M&As – even after thousands have been made – are that most M&As fail, by 50%, 65%, 73.374%…..whatever number it’s not a good batting average and it adds up to trillions of dollars in lost value. Yet the reasons for their failure are many, disastrously obvious and surprisingly easy to avoid.
The purpose of paper is to stimulate your thinking about the issues. Demonstrate how brand based transformation can drive top line growth & internal integration. Explore possibilities to ensure M&A success. Finally illustrate how the strengths of The Dean Crutchfield Company helps you achieve growth by tailoring brand-led techniques that are uniquely participant centered to guarantee results. Whether it’s a merger that requires a believable strategy that can translate across the business, or better internal understanding, encouragement, winning new mandates, ambition planning or a better communications platform, you will find our fee in your success within weeks.
Secondly, post deal communication is not handled well. This is often caused by the differences between the heady aspirations of the deal team on Friday afternoon and the fact there’s still business to be done on Monday morning.
The soft side is the most neglected as it’s ignorantly believed by so many not to be that vital in the deal making process and consequentally management find out to much to their chagrin that culture, problems of retaining key personnel and cross state M&As clashes as a result of pay conditions, pensions, become rife.
Remember – there are no mergers of equals. The obvious truth is that management’s in a hurry to grow and complete integration is necessary to typically:
- Cut costs
- Combine back office systems
- Release synergies
- Merge sales forces
- Blend product lines, etc.
In these scenarios the enterprise that has the strongest culture & practice will dominate! It’s as simple as that and obvious examples like Coca-Cola, GE, IBM, Google reign supreme.
There are two determinates of value creation. The first is how tight the ship is run and typically the successful ‘acquirer’ are those with a history of cost control and productivity. In this scenario the ‘acquirers’ culture will be the more successful in directing and getting the most out of the deal. The second is the closeness of relationships inside and outside the business. In M&A, soft is hard and the closeness of relationships with employees, customers, suppliers, partners is crucial. The business that has the deepest rules wins and the challenge is to embed the benefits of their
knowledge/approach. Brand architecture plays a huge role here: is it to be logos, labels, layers and lawyers or worlds shared by employees and customers?
1. Tough keeping business performing when everyone’s attention and concerns are projected on outcomes and the potential fall out at a personal and professional level whilst managing the acquisition.
2. Not addressing victor & vanquished attitudes. It’s surprising to learn that most companies end up spenting most of their energy on the vanquished. A natural reaction given the anguish that the process causes on scared employees.
3. Loss of momentum caused by the attention on the M&A and the fiefdoms mindful to button down the hatches
4. Leadership struggles (diverting/devisive). From the tea lady up, who is going to be the boss? These traumatic struggles are not just happening in unknown corporations. They have been made famous in major corporations like Gary Wendt and his abrupt departure from GE.
5. Inability of managers to lead the people through the transition. To be a leader you need to know how to follow, but if the guardrails aren’t there, you find your self staggering in the wrong direction. An email ain’t going to cut it. How can you leverage and orchestrate knowledge inside and across the business?
6. Do as I say, not as I do is a key part of the aforementioned. A lack of role models leads to confusion, distraction and poor performance and a lot of resumes spinning around!
7. Internal opposition to new ways of working is an obvious hurdle and there is no magic wand. That said, the more inclusive the communications can be on what’s the strategy and how it’s going to unveil itself over the coming weeks/months is critical. At these early stages it is recommended to create an interim brand for the integration that can act as a rallying cry.
8. Resistance to the new structure. Small company or large, any M&A activity attracts resistance from both outside and inside the company. New structure often means big changes at the senior management level.
9. Not engaging the workforce, fear of job losses. This is when the need to have senior contact program running across the enterprise is called for; identifying people in the merged busineses that need to share information in the hope you can build some bridges and discover new opportunities for the merged entity.
10. Not addressing conflict and culture issues. This is about separating appetites from the real requirements of what needs to be done and being clear in your communications how you expect the company to behave. That’s just the internal needs.
1. Market share does not grow.
2. Confused brand identity. Working with GE’s Masterbrand architecture we found over 11000names, brands, products, services and entities that encompassed it’s 12 divisions with a brand architecture that was up to 25 layers deep in some of its businesses – some you didn’t know were GE! That’s a lot of money being spent maintaining things that shouldn’t be. Time for open heart surgery and there will be a scar.
3. Publicized promise is difficult to match on the inside. At the turn of the century Coca-Cola realized it was speaking with two mouths. One to its analysts about the huge 20% savings it was looking to make in operational efficiency and staff reduction whilst simultaneously, HR was communicating to staff how important they were.
4. Regulators (can) both hinder and help process. Do we want two banks, two airlines, etc? No, so regulation is good. Then there’s the other side where regulation is an imbroglio.
5. Existing customers/suppliers no longer remain loyal. Druckers ‘Force 5’ explains this conundrum as rivalry dominates conversations, the power of customers in the category, suppliers, new entrants
6. Shareholders doubt acquisition strategy: shareholder return is an action not a strategy.
7. How do you manage the absorption of the acquired brand(s) with its own values – operationally and culturally into one ‘family’?….or not? And if so, how should you manage it?
8. What is the best transition strategy and how are both brand’s affinity and performance being calculated, e.g., how do you absorb the acquired business/brand into your house style? And if so, how should you manage it? Do you permit the business to keep its name under a new holding company ‘group’ concept?
9. Do you manage the M&A as a transitional process, with an initial focus on product marketing and brand rationalization?
10. Do you communicate other dimensions to the added value of the deal beyond simply increasing size, scope and resources?
A Profitable Capital Management Program: Internal
1. Do not over reassure internal audiences by saying there will not be significant changes
2. Ensure regular and frequent communication using both face to face methods (for effectiveness) and digital methods (for timeliness)
3. Focus on survivors not on leavers
4. Do not pretend it is business as usual
5. Explain the business rational for the transaction (and repeat)
6. Do not approach integration as a phase, but as an on-going process
7. Be clear about the future and create a sense of direction (and brand it)
8. Do not be afraid to state that you do not have all the answers
9. Manage external and internal communications together
10. Have a communication (and integration) plan in place before signing the deal, which includes:
- Audiences (including unions and work councils)
- Key messages
- Activities and materials
- Approvals process
However, Transformation does not occur simply through somebody in a suit standing up announcing it. There must be a vision. Moreover, it has to amount to more than a few well chosen words. Here’s a check list that will assure you a more effective program:
- Contact program between management
- Key messages – internal and external
- External consultants – who, why and what
- Interim communication branding
- Integration tools
- Integration of communication terms
- Identify new vision, mission and culture
- Plan identity and communication strategy
- Reporting news – internally and externally
- Communication needs for transformation
- Process for feedback
In summary, energy and focus should be placed in 5 key areas:
- Announcements and pre completion
- Early post completion