The Communicator Speaks

On election night this commentator suggested that Obama's true strength lay in his potential for combining action with oratory. So far he appears to be fulfilling this potential.

In addition to some well received picks for Treasury (Geithner) and NEC (Summers) which have had the media swooning and the markets reaching for the smelling salts, Obama has established an Economic Recovery Advisory Board (modeled on Pres. Eisenhower's Foreign Intelligence Advisory Board) and appointed former Fed Chairman and fabled inflation slayer, Paul Volcker to head it. 

All decisive action. But being in PR 

what has really caught this writer's attention is the series of three, well-choreographed press conferences that he held in the days running up to Thanksgiving. While most President Elects would be keeping a low profile at this point, PE Obama has judged correctly that what is needed now is not just smart action but lashings and lashings of communication. He has, of course, left himself lots of wiggle room: on day one announcing a huge stimulus package without outlining how huge or where the money was coming from; on day two promising budget cuts without telling us who exactly was going to suffer. But frankly none of that is as important as just being out there, ahead of the story. Where for three months politicians have been reacting to the story as it unfolds, for three days PE Obama decided to be the story and let the world react to him. And by drip feeding positive news across a series of conferences while leaving us hungry for more details that is exactly what he has been able to achieve.  

By the way, on the subject this - from the Economist - is very useful:

OMG! WTF? ROFL!! etc...

Seems the tone deafness that has afflicted the financial PR community of late may be contagious. Seriously:

- Who put these guys on private jets?

- Did no-one question the impression this would make?

- As they will now almost inevitably be hung out to dry does anyone seriously doubt the importance of perception management during a crisis?

Just take a look at the comments on Digg for the public reception. 

 

So what now PR people?

This weekend I'm writing an article for Cognito's communication magazine for the financial sector - word of mouth - on what companies in the sector should be doing in these turbulent markets. The short answer is to do all the standard PR activities, but to make sure they are done better and inline with company objectives. What's interesting about activity in a 'crisis' is that often it drives people and companies to improve. The good will get better and the bad either get good or go away. 

Paulson In the Twighlight Zone

Ok, so here's the deal on Paulson. We are living through a time when the wall between perception and reality has broken down. Investors, consumers, businesses, the media etc anticipate terrible news and in responding to this in such a coordinated way create and perpetuate the reality they are most scared of. It's like shouting 'fire' in a crowded ballroom: people are panicking and getting crushed in the stampede.

This scenario both exonerates and indicts Paulson. He too is responding to the market and trying to be pragmatic - which would be the correct response under 'normal circumstances'. But he has seriously miscalculated the level to which his actions are under the microscope and the ease with which the 'perception' of weakness can suddenly become 'real' market weakness. That's what happened yesterday. I can't advocate placing PR over pragmatism but he needs to pay more attention to perception because in this new world order there is no longer the same divide between what we fear and what we experience.

It all comes back to good PR...

The financial markets may be going through one of the most difficult times in living memory, but there is still activity and plenty of it. All of Cognito's offices are experiencing a high level RFPs and demand from across the financial sector which demonstrates that there are many businesses who plan on taking advantage of the benefits that good PR and marketing offer - particularly in bad markets.

Budgets will be allocated more prudently, and rightly so, but after all the shouting, companies in the financial markets still need to use good PR and marketing to drive their businesses - perhaps now more than ever. 

Hedge Fund Communications III

As this blog has noted before, in times of high performance hedge funds could get away with their trademark silence. In today's market, funds are quickly discovering how necessary transparency and disclosure to both investors and the media truly is.

A positive example of proactive communications came from Blue Mountain Capital Management (BMCM). From a communications angle, BMCM did two things right this week:

1. In the face of unprecedented outflows, BMCM Founder and CEO Andrew Feldstein wrote a letter to investors outlining revised terms for their funds. Striking a quid pro quo, investors agreeing by November 11th to hold their money with BMCM through 2009 will pay lower fees through 2010. This was a clear way to explain to investors that the stability of capital is directly correlated to both the stability of the fund and investor returns in these times of volatility. To be sure, BMCM is only down 2.4% in 2008. Investors - many fund of hedge funds and pensions - pulling out of performers such as BMCM are reacting to both irrational fear and the need to liquidate holdings to post collateral and hold cash. With BMCM, this activity is shown to be indiscriminate. Clearly a large and stable fund such as BMCM deserves better than to have 25% of its capital withdrawn by investors.

2. BMCM agreed to interview with WSJ during these pressing times. Instead of hiding and fanning media suspicion over the root of such extensive withdrawal requests, i.e. projected dire performance through Q4, CEO Feldstein spoke with the WSJ, discussing pandemic investor fear and the cycle of withdrawal while reassuring the health of the fund and the dependable cash positions held currently.

By taking these actions BMCM is effectively fighting back what has been a self prophetic cycle of fire-drill selling amongst the investment community, driving down capital, prices and sentiment and resulting in a lack of will to provide the capital and credit our global economy needs to function.

Wall St. Bonuses II

This is much more like it. ABA President Yingling's letter was good but at 3 pages it's unlikely to sway the mainstream news or the average taxpayer (correction: bank shareholder). If the FS industry really cares to defend compensation it has to be articulated in bumper-sticker sized phrases.

Finally, A True Communicator In Chief

It's 3:00am in the East Village and the streets are still buzzing with the sounds of car horns, guitars and homemade percussion. This party promises to go all night.

Forget for a moment the magnitude of tonight's outcome. Forget America's inexhaustible capacity for reinvention or the sweeping policy changes which tonight's victory will usher in. Forget slavery and segregation; the injustices of the past or the supreme court justices that will almost certainly be appointed under an Obama presidency. Others will comment on such matters.

What interests me above all is that America finally, and once again, has a true 'Communicator in Chief'. With his ability to use language, discourse, tone and even humor to such dramatic effect, Barack Obama has the potential to stand shoulder to shoulder with some of the Presidency's greatest archetypes. Leaders like Lincoln, FDR, and JFK had not only the courage to act but, crucially also, the power to persuade - and in coupling the two were able to bring around substantial change at a time when the country and the world needed it the most.

Bonuses - The Next Communications Hurdle

According to urban legend the godfather of publicists, P.T. Barnum, was asked by a fish cannery to help clear its warehouse full of unattractive white salmon. Barnum did so by sticking labels on the produce which read: "Guaranteed Not to Turn Pink in the Can..."

Well Phineas, Wall Street needs your winning brand of double-think now more than ever.

(Keeping with the fishy theme) the sharks are circling. First Waxman and Cuomo and now House Financial Services Committee, Chairman Barney Frank. All demanding either justification for or cessation of Wall Street's upcoming round of bonuses which, among the firms taking part in the government's TARP plan, is estimated to come in at around $20bn. Even the White House smells blood in the water.

How will the FS Industry manage this issue? Will this be framed for them by regulators and the media as "The Bailout" or "Wall Street vs. Main Street" have been over the past months? Or will the industry find its voice and present its case forcefully and cogently. The fightback has started here and here but so far the argument seems to be that the government is even less trustworthy with taxpayers' money than the banking industry. Will this be enough?

On a lighter note, the head of the American Bankers Association who is spearheading to counter-offensive is Ed Yingling. I was trying to recall where I had heard that name, or something very similar, before...and then it came to me: Ringling Bros. Perhaps we needn't fear after all, perhaps the spirit of the great showman still lives....