In case you missed it, Bloomberg acknowledged late last week that it had taken steps to prohibit its reporters from accessing customer data following a complaint from Goldman Sachs.  A Bloomberg spokesman told the New York Post:

“Limited customer relationship data has long been available to our journalists, and has never included clients’ security-level data, position data, trading data or messages,” said Bloomberg spokesman Ty Trippet.

“In light of [Goldman’s] concern as well as a general heightened sensitivity to data access, we decided to disable journalist access to this customer relationship information for all clients,” he noted.

Let’s start with the fact that Bloomberg was busted by a Wall Street bank, Goldman Sachs, itself long a target of Bloomberg’s reporters.  Usually it’s the bank on the hot seat, fielding questions from aggressive reporters.  Seeing the roles reversed must have brought smiles to many at Goldman (and J.P. Morgan, the Treasury Department and the Federal Reserve, who now have joined the complaints about the practice).

If that weren’t delicious enough, there’s also the fact that the New York Post broke the story, with “serious” business publications like the New York Times and the Wall Street Journal trailing in its wake.

And neither the Times nor the Journal have added much in the way of new information since the initial report by the Post.  In fact, it was Buzzfeed, which started its business-news coverage just weeks ago, that was responsible for the latest revelation – that terminal-peeping was known to Bloomberg management as early as 2011.  What’s more, the Times has cut its media coverage in recent weeks, only to be scooped on a media story by the upstarts at Buzzfeed.

For its part, Bloomberg has done fairly well so far in handling the crisis by apologizing to Goldman and prohibiting reporters from accessing private terminal data.  Whether any individuals will be held accountable remains to be seen – another ironic similarity with Wall Street’s scandal-plagued past.

This scandal will continue if several things were to occur. The first is if the group of firms and individuals targeted by Bloomberg staffers grows. Right now it is a handful of big institutions, but it’s possible other organizations had their terminal usage data screened by Bloomberg reporters, too.  If a non-US entity, like a sovereign wealth fund, foreign central bank or a national treasury office, come forward with similar accusations, the issue will be even more serious for Bloomberg.

The scandal will also run on if there is further evidence that Bloomberg management knew about these practices and did nothing to discourage them.  If that comes to light, there will also be uncomfortable scrutiny for Bloomberg News supervisors and senior executives.  In that case, the story’s trajectory will be very similar to the News Corp phone-hacking scandal, which has been running for years now.  Of course, unlike News Corp there’s no suggestion of illegal conduct by Bloomberg officials, but it could be a very messy problem for the media group to clean up all the same.

When Tami Reller, head of marketing and finance for Windows 8, sat down with the FT’s Richard Waters, she probably thought it was going to be a simple interview about software.  It didn’t turn out that way.

Tami Reller

The front-page article in Monday’s FT reported that Microsoft was preparing to make major changes in its Windows 8 operating system, calling it “one of the most prominent admissions of failure for a new mass-market consumer product since Coca-Cola’s New Coke fiasco nearly 30 years ago.” Ouch.

What played out next was a public-relations nightmare, as other media outlets picked up the theme and Microsoft scrambled to contain the damage, issuing a brief statement saying the FT got the story wrong and posting its own interview with Reller on a company blog.

The overall result was a flurry of unfavorable reports that replayed negative coverage from several months ago about the system’s problems – reports that surely prompted Microsoft to mount a counter-offensive by approaching the FT in the first place.

What lessons can companies learn from Microsoft’s misfortune?

First, have a clear message.  It sounds so simple, but Microsoft seems to have forgotten this basic principle of communications.  Reller should never have spoken to the FT without having a clear message and thorough preparation to handle tough questions.  With all of the negative commentary around Windows 8, Microsoft must have known how difficult the interview would be.

Even with good preparation, of course, an interview can go off the rails. That’s why it‘s important to have a contingency plan.  It looks like the FT was especially aggressive in this case (the Coke comparison was overdone), but that’s always a risk.  When the unexpected happens, what a company does next is critically important.   A strong corporate statement, media interviews for senior executives, briefings for analysts are all ways to respond aggressively to a damaging news article.  This story would look very different if Microsoft CEO Steve Ballmer had issued a comment or appeared in a short video statement.

Another lesson: If you’re going to make big change, make a big announcement.  It appears Microsoft wanted to quietly suggest it was considering changes to Windows 8. That would have been a reasonable stance when customer problems first appeared shortly after the product’s release.  But now, months later, a more definite plan was required.  If major changes are in store, Microsoft should announce them and try to win back customer favor.  As it stands, they’re somewhere in the middle, saying “key aspects” of the software will be changed, without being more specific.  That only adds to the uncertainty surrounding the Windows 8 strategy.

Last, if you aren’t ready, say nothing.  Sometimes the most difficult thing to do is keep quiet.  But that is often the best strategy if your new product or service isn’t ready for launch.  Very few companies can spin promises about new products into favorable media coverage (Apple could, at least in the past, which must drive Microsoft nuts).  Having something tangible is essential.  Without a clear strategy for Windows 8, Reller should have skipped the interview.

What Companies Need to Know About LinkedIn

By Bruce Segall

LinkedIn presents a dilemma for many organizations:  Individual business people, not companies, are the main users and focus. Companies do not control the sum of the impressions that their employees make through their profiles and activities. While LinkedIn poses risks to organizations, forward-thinking companies can be proactive in managing it, both to take advantage of increased “company profile” functionality and, most importantly, to encourage their professionals to maximize their visibility. To help organizations, here are four ways to manage your risk through LinkedIn, followed by four ways to leverage the tool.

Managing Key Risks

1)     Have a written social media policy. A formal social media policy about using LinkedIn, Facebook and other social media at work is a way for companies to maintain at least some control. Protiviti’s fall, 2012 study showed that 43% of companies don’t have a social media policy at all, a figure which is undoubtedly higher for smaller companies not included in this research. A social media policy should include which media can be accessed at work, by whom and with whose permission, disclaimers required, guidance on tonality and reminders to respect customer service policies and intellectual property. Online examples of social media policies can be found here. Once your social media policy is in place, don’t forget to properly communicate and periodically update it.

2)     Employees should not rely too much on LinkedIn. Some employees get very enthused with LinkedIn, using it as an alternative/replacement for the company’s work tools. For example, one can replace Outlook with LinkedIn as a centralized repository for all contacts/connections. However, a very large base of LinkedIn Connections results in very slow access. Plus, on very rare occasions, a LinkedIn account is inadvertently shut down or locked out, in which case the Connection data disappears. Last, while companies typically retain ownership of all work-related data when an employee leaves, LinkedIn Connections are totally “portable.”

3)     Be mindful of the impression that your employees are making. Employees have 100% control over their LinkedIn Profile – where and when they make the updates and what they say. Yet their Profile features you, their current employer, prominently and thus impacts your brand image. Research shows that especially the employee’s photo has a large impact on LinkedIn, so a less than professional photo turns your employee into an ineffective brand ambassador. You might consider hiring a photographer to shoot employees’ LinkedIn profile pictures. In general, be mindful of what your employees are posting and saying that might reflect on your company.

4)     Understand the subtleties of certain LinkedIn features. One client asked me: “How come John Smith is shown on our company profile. He worked here briefly and wasn’t well-regarded?” Under the “Insights” Tab of a company profile, LinkedIn will legitimately use its “intelligence” to show previous employees. Like many features, this one exists to benefit the members, not the companies. However, an ex-employee might misrepresent his/her relationship with you.  In this case, you can contact LinkedIn customer service to request that the error be corrected.

Leveraging LinkedIn

1)     Build up your Company Page – While its primary focus is individual visibility, LinkedIn has recently enhanced the functionality of its “Company pages”. With a little effort, your LinkedIn company profile can be visually appealing, like your website. You can build “followers,” send informational updates with video links, and even direct updates only to followers from select industries, functions or geographies. Avaya (70,120 followers) is one large company with a good LinkedIn presence, and the engineering firm Burns & McDonnell (10,908 followers) leads in the midsize category.

2)     Give your staff tools to leverage LinkedIn – Some companies conduct formal training programs with outside experts, while others appoint internal experts to mentor their peers. Last year, Burns & McDonnell trained 1200 people (over 1/3 of its work force) on social media engagement. Besides receiving recognition by B2B Magazine for their LinkedIn presence, a quick look at the employee Profiles shows that their efforts have paid off – the company is more visible because far more of its employees have a professional Profile picture, an effective “Professional Headline” or Profile lead-in, and more detailed Profiles.

3)     Make LinkedIn part of your Marketing Mix. With every new marketing announcement, make sure to include LinkedIn updates both through your company page and employee accounts as part of your launch plan. While LinkedIn is not suited to large-scale email campaigns, it can be valuable for small, highly targeted and personalized efforts. For example, I have used LinkedIn very effectively for event recruiting as follows: Many professions have LinkedIn Groups for specific geographic areas. Using the information and access provided by LinkedIn, you can choose which members of the group to invite and send a message that you personalize based on their profile. Targeted ads may work well for others and start for a minimum of $10/day.

4)     Integrate into your HR Strategy – Chances are that your in-house recruiters are already leveraging LinkedIn for recruiting.  If not, LinkedIn can help large companies save millions of dollars in recruiting expenses. Beyond traditional advertisements and postings, LinkedIn offers one-on-one targeting to build awareness among ‘passive’ but high-potential job candidates.

There is an old expression – “The Smallest Effort is Not Lost.” Using some care and precautions as described in the first part of this post, LinkedIn is a great way to extend your brand at a reasonable cost.

Bruce K. Segall is a professional services marketer, President of Marketing Sense for Business LLC and a LinkedIn trainer.

Gary Gensler, Chairman of the Commodity Futures Trading Commission, has been pushing hard for new rules that would force additional reporting of banks’ overseas trades.  Banks have called the proposals redundant and costly.  It’s a complicated issue that has been the focus of an intense tug-of-war between the Commission and bank lobbyists for months.

But Gensler captured the essence of his position in a brief quote, which appeared in the New York Times:

“It would be letting down the American public if we said, we are just about to complete the task but now, let’s retreat,” Mr. Gensler said in an interview. “If we don’t do this right, we will blow a hole in the bottom of the boat of reform.” (Emphasis added.)

Boom. “Blow a hole in the bottom of the boat of reform” is a powerful way to frame the issue. It’s a simple yet memorable phrase – the mark of an effective sound bite.  It also fits the popular narrative that big banks are determined to oppose new regulations in order to preserve their resurgent profits.

Now contrast Gensler’s quote with the one from Ken Bentsen, a financial-industry lobbyist:

“We should all care, because that cost will have to be passed on, in the form of higher prices for products sold to consumers or a lower return for investors.”

Well, that response certainly has been the position of the banks all along, but it isn’t very memorable and it definitely isn’t colorful.  And it does nothing to challenge the prevailing narrative.  He would have done better to craft a lively sound bite instead.

Here’s another noteworthy example from the past week. This time the issue is the proposed bill to require online retailers to collect sales taxes, which is opposed by eBay.

Brian Bieron, Senior Director, U.S. Government Relations and Global Policy at eBay Inc., in an email after the Senate moved ahead on a bill to allow states to force online retailers to collect sales tax, [said]: “If Keyser Soze is right, and the greatest trick the devil ever pulled was convincing the world he doesn’t exist, then the second greatest trick has been pulled by the proponents of the Marketplace Fairness Act to convince liberals to abandon their traditional support for small businesses. (Emphasis added.)

Whew, that’s a mouthful. It’s not quite a sound-bite, really, more of a long-winded analogy.  Analogies are good rhetorical tools, too, but they are best when brief. Tellingly, this one didn’t make it into news reports.

Good communication can make the difference in a close fight, whether it’s over a public-policy issue, a shareholder proposal or a lawsuit.  Analogies and sound-bites are essential tools when communicating on critical issues – and what effective risk communication is all about.

Drexler recently was interviewed for a short feature in Fast Company, in which he offered 10 rules for creative success. His points are right at home in a discussion about risk communication, because creativity is all about taking risks.

Risk communication is our term for what you say (and how you say it) when you need to make a big leap in business performance.  It’s the communication strategy – and the content – for going beyond business-as-usual to reach a major goal.  It focuses on how you communicate when taking a conscious risk (like turning around a puny retail apparel brand) in order to improve your odds of success.

Drexler painted a pretty bleak picture about the ways companies often inhibit creativity. His observations can be applied equally well to communications:

1. Most companies are locked in last century’s organizational model.  Drexler speaks about layers of bureaucracy and a kingdom mentality at most companies.  Such structures impede good communication, too. Rigid divisions still exist between those responsible for speaking to customers, investors, the news media, advocacy groups and regulators.  It’s no wonder these companies have fuzzy or even contradictory messages that confuse audiences and leave great strategies stalled at the gate.

2. Candor is very hard to find.  It is amazing how many organizations don’t want to tell it like it is.  They posture, spin and decorate the facts, but in today’s networked world, reality has a way of breaking through even the best defenses.  And everyone is able to measure it against the company’s words every day.

3. Committees kill good communication.  Committees are meant to find compromises, not breakthroughs.  That’s why they seldom produce good products, and they rarely produce effective communication.  Anyone who has read a corporate annual report – usually the product of a fairly big committee of lawyers, accountants and, yes, writers has seen this effect first hand.

J.Crew is a place where risk-taking is an everyday occurrence and a key to the company’s remarkable success since Drexler joined as CEO a decade ago.  The Fast Company article speaks about the strong risk-taking partnership Drexler has with Jenna Lyons, the company’s president and chief designer:

“Their partnership would mark the end of the days when J.Crew’s product design was dictated by corporate strategy. Together they would make and sell only what they loved.  The love would not be unconditional; they would adjust their product line always, trying new ideas, assessing, and quickly getting rid of anything that didn’t work.  Under Drexler and Lyons, J.Crew would become a company of constant and freewheeling experimentation, iteration, adaptation.”

Good risk-communication practices show up in several ways at J.Crew.  Lyons is known for her direct, personal touch with her team, and gives them permission to take risk.  Lyons and Drexler have also paid close attention to the brand, and its distinctive look and feel now reaches everywhere – “from the employee handbook to the layout of the nursing room” – so that everything works together.

That strong environment has also opened the way for J.Crew to carry products from external designers, a once-radical notion that is giving customers more reasons to visit the stores and the website – and fueling the company’s revenue growth.

Those are good lessons for a company in any industry.

Andrew was quick to dismiss the revelation that a partner had disclosed confidential client information to a friend who later traded on it.  In a remarkable interview with the Financial Times, he described the incident as a ”one-day wonder:”

“Michael Andrew downplayed the global prominence of the controversy involving Scott London, a senior audit partner who has admitted leaking client secrets to a golfing partner who traded on the information.  He told the Financial Times that the story grabbed headlines “because it was a slow news week”.  However, he conceded that the scandal “will probably hurt” the firm’s business in China, where Mr Andrew is currently on a visit to Shanghai.”

KPMG withdrew its audit opinions on Herbalife and Sketchers, two companies under London’s supervision.  Shares in Herbalife, already battered by a showdown between two big investors, lost more than $100 million in market value after the news.

So it’s likely the companies and their shareholders aren’t treating the matter as lightly as Mr. Andrew.  Nor are prosecutors, who filed criminal charges against London, the former KPMG partner.

But for his part, Andrew doesn’t seem at all upset that one of the most senior executives at his firm did the worst possible thing where a client is concerned.  It would have been nice to see at least a little bit of outrage.

More than that, it appears KPMG has learned nothing from the episode, and has no plans to make changes in its processes, controls or staff training.  That doesn’t inspire confidence in the firm or its ability to avert problems in the future.

It’s fine for the CEO to try to turn the page on a scandal.  And it’s natural to point out that no organization can be completely safe from the actions of a corrupt senior executive.  But that should not be the end of the message.

Accounting firms have for years insisted that they are not to blame when things go wrong.  When their audit clients are revealed as frauds, they portray themselves as passive bystanders who relied on information from company management when examining the books.   And when the firm itself has a problem, it’s brushed off as an isolated case rather than an endemic flaw.

Reading the entire interview, it seems that the KPMG communications strategy is simply to downplay everything.  Proposals by regulators to name individuals behind company audits?  Not necessary!  Investigations of audit work at now-bailed-out banks?  Nothing wrong there!  Fines and settlements for selling dubious tax shelters?  Water under the bridge!  Dispute over audit cooperation with China? Not a “burning issue”!

At some point, minimizing the seriousness of the issues catches up with you.  Clients turn away, your good people leave.  Worst of all, you’ve lost precious time, and addressing the issues becomes even more difficult.  If it keeps to its current strategy, KPMG has a difficult road ahead.

This week will certainly be remembered for the shocking tragedy in Boston, where three people were killed in two deadly bombings at the Boston Marathon.  But it may also be remembered for the media’s conduct, and how it struggled to report on a rapidly shifting situation and a multitude of sources, from police officials to street-level observers armed with smart phones and large social-media networks.

The urgency to report a fast-moving story means news outlets sometimes get things wrong.  But news coverage of the Boston bombing saw a surprising number of missteps, notably from CNN, which mistakenly reported on Wednesday that Boston police had a suspect in custody, and the New York Post, which had shocking blunders on its front pages twice in one week.

Social media presented other challenges. Twitter had accurate, informative observations, often from eyewitnesses as events were unfolding.  But it also had rumors, speculation and just plain mistaken reports, which were amplified as they were shared.  To their credit, many news organizations cautioned their followers that Twitter updates could be inaccurate, and they urged their reporters to verify facts before posting.

We had a taste of this confusion during the reporting of Superstorm Sandy.  Twitter and other social media were great for following events, but they often got the facts wrong.  The impact was muted because the storm kept reporters of all kinds mostly indoors.  Not so on warm spring days in Boston.

Of course, balancing speed and accuracy has always been a challenge for those whose business is covering breaking news.  For years that was the province of Associated Press, Dow Jones, Reuters and other news wires, which had years of experience and careful editors watching every bulletin that went out.  What’s different today of course is that we’re all in the immediate-news business, thanks to social media and smart phones.

Here’s a good post on the effort to find that balance, from Inside Breaking News, which includes the widely shared comment from Matt Roller that Twitter “does its best work in the five minutes after a disaster, and its worst in the twelve hours after that.”

The media also became the story at times today.  There were concerns early on Friday afternoon that the suspect might be following law enforcement activity via social media, which prompted the Boston Police Department to suspend its Twitter updates for a time.  Law enforcement officials had warned the media earlier not to broadcast neighborhood searches, so as not to put police officers in danger.

The New York Post aside, most print dailies did a good job covering the news.  Their problem was the same as it’s been for years now, only it was made more apparent by the speed of developments.  Today’s print edition of the Boston Globe was hopelessly out of date once it arrived on doorsteps this morning, and the same was true for daily newspapers across the country.

When the next crisis lands, news organizations might be better at handling all these pressures, but it’s likely things will be just as confusing as they were this week.  We crave the immediacy that’s possible today, but we are still adapting to how imprecise such news often is.

There are many CEOs focused – nay, obsessed – with getting covered in the pages of the Wall Street Journal.  An article in the Journal would validate the company’s strategy, rocket the stock to new highs and mark the CEO as a Serious Corporate Player.  It would be publicity nirvana (assuming the article was positive), with reprints and back-slapping in great abundance.

Well, that world is long gone (although CEOs obsessed with publicity remain). The Journal still commands influence but it is a force now shared with dozens of outlets, from newswires, television and, in more recent years, news websites.

News websites aren’t exactly new of course. The New York Times and The Wall Street Journal have been on the web for years, while still rolling out daily editions on newsprint.  But now news organizations that exist only online are covering business, economics, policy and world events – the core of “serious” journalism that the Times, the Journal and others once had all to themselves.

A little more than a year ago, Reuters and Bloomberg were scooping up reporters and editors by the fistful, from the Times and other media groups that were cutting staff.  Roya Wolverson’s departure from Time, where reporters are bolting as fast as they can send out resumes, is an updated version of this narrative. This time it’s Quartz – an upstart web-only publisher – that is doing the hiring.

And it’s not the only one. Yahoo! has expanded into business news, and recently hired Mike Santoli, the widely respected Barron’s columnist.  Business Insider continues to grow.  And BuzzFeed, the monster that seems to be marching toward world domination, is adding business news to its eclectic soup of celebrity gossip, politics and funny cat photos – all of it meant to keep people viewing and sharing its content.

It’s no accident that these forays into business news are happening after the presidential election.  Visitors flocked to online sites to keep up with the latest news in a close-fought race. Keeping them by offering hot news from the business world is an extension of that strategy.  And if overpaid celebrities with gargantuan egos and a habit of behaving badly are fodder for news headlines, lately the corporate world has been supplying them in abundance.

But even humble, hard-working CEOs (and their equally hard working if underpaid PR managers) should keep a close eye on Quartz, Business Insider and Yahoo Finance.  They’re serious about covering the issues and breaking important stories. My bet is they will be doing more exclusive features – a coveted prize – both with and without the cooperation of CEOs.

Just look at Yahoo. In early February the Yahoo news politics team had an exclusive interview with Senate Minority Leader Mitch McConnell, just as the debate on immigration reform was heating up.  Exclusive interviews with CEOs by the Yahoo Finance news team can’t be far behind.

I was in Vancouver last week, a delightful city near mountains and sea.  And while riding out my jet lag with some evening television, my attention was riveted not by the US-Canada women’s hockey game (won by the Canadians in a thrilling comeback) or the international curling championship but by something quite different: a panel discussion on Canadian banking.

The program was the sort of thing you could find on any business-news channel, with four panelists representing a spectrum of opinion, and a serious-minded moderator.  But the conversation was completely different from what you’d see in the US, in both tone and substance.

First, there was not a fierce discussion of “too-big-to-fail” or separating trading and lending or calls to break up the biggest banks. There was none of the raw anger toward banks over bailouts, excessive pay or home foreclosures. In fact, nearly all of the issues that have preoccupied – and divided – public debate on the financial sector in the US were absent. For the most part, Canada simply doesn’t have them.

Canada’s banks largely avoided the excesses that brought disaster to their US brethren, like sub-prime lending, complex securitizations and excessive leverage.

They also have operated within a longstanding public consensus on the role of banks in the economy, which has meant more regulation than in the US and steady if unspectacular profitability. But they have also kept to their strategies and executed.  Their success shows the power of having a simple message backed by strong performance.

There’s no better example than Toronto-Dominion bank.  Through a steady push into the US over the past decade, it is now the eighth largest bank in the US, with more branches than Citibank.

It announced last week that Bharat Marani, the executive who led the bank’s push in the US, would succeed Ed Clark as CEO next year, in a long-planned succession.  In a call with investors, In a Financial Times article, Masrani stressed the messages that have been at the core of the bank’s strategy:

“Our message here is continuity.  This is not a change that entails changing what we stand for, what our strategy is or what we deliver day in and day out….  We have made it clear that we are a North American bank.  We are an organic growth engine. We will continue to grow and take share.  And 10 years from now I expect the bank to be much larger than what it is today.”

TD Bank has made its share of acquisitions, too, but its core message of organic growth and expansion in North America have been remarkably consistent over the past decade. And TD Bank has delivered the goods, with its US assets growing from $21 billion in 2000 to more than $170 billion today.  Contrast that with the stumbles of big American banks like Citibank and Bank of America, or the retreat by European banks in the wake of the financial crisis.

The Canadian panel had its moments of drama, to be sure. There were mild (and polite!) disagreements on whether Canadian banks were lending enough to support the economic recovery, and some panelists voiced worries over the dangers of derivatives and proprietary trading. But those moments were nothing like the flame-throwing seen on countless similar panels in the US when these issues are discussed.

Canadians prefer to leave passionate battles for the hockey rink.

See the panel discussion here.

Over the past three months, we handled communication planning for a potential M&A transaction for a privately held food company, a new client.  We also won media coverage for a global real estate investment manager, and helped the firm sharpen its brand by producing original content.

Lastly, we have been hired to develop a strategic communication plan for a mid-market retailer, an assignment we will kick off next week.

As always, we thank our clients for entrusting their risk communication needs to us.