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A new book
by Dick Martin, former PR guru at AT&T, is a must read
for marketing executives. The book (Tough Calls: AT&T
and the Hard Lessons Learned from the Telecom Wars) examines many of the
struggles the company endured as it tried to find its
way in the deregulated jungle. One example highlights
the unintended consequences of a PR campaign:
In late 1995
AT&T was involved in manufacturing, telephone service,
and computers, so it decided to split the company into
three pieces. The move made sense from a shareholder and
management perspective, but involved significant
employee downsizing.
The PR team
crafted a message that was geared towards investors. The
company actually hoped to set the record- for downsizing
by eliminating 40,000 positions - thus demonstrating its
determination to build investor value.
The dream
message turned into a nightmare as AT&T quickly became
the poster child for corporate greed. The PR team gained
more press than it could have ever imagined – almost all
bad.
By not
recognizing the importance of television media, not
responding quickly to negative press, and not taking
into account the emotional effect of certain facts, AT&T
suffered a series of negative stories that hurt the
reputation of the company, causing both a drop in share
price = and customer attrition.
The book’s
writing is clear and brutally honest. For example,
here’s a postmortem on this PR tragedy: “No one at
AT&T's executive table understood the full emotional
impact of our downsizing announcement on people beyond
those who were directly affected. Incredibly, in
hindsight, none of us had connected the downsizing
announcement to (Chairman and Chief Executive Officer
Robert) Allen's compensation, which had been largely
decided months earlier….
“Ironically,
we eventually did some of the right things, but by the
time we did them, it was too late. For example, we ran
ads to help displaced workers find jobs. Had the ads
appeared in the first days following our downsizing
announcement, they would have demonstrated some degree
of social responsibility. Ninety days later, they
appeared to be a reaction to the public backlash rather
than a sincere effort to help our employees.”
Clearly, any
communications executive can learn from this book, so it
goes on our suggested reading list. For more information
and a sample chapter detailing the crisis above,
click
here.
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