Trump’s CEOs: Why they felt having a dialogue was better than taking a moral stand

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The CEO of Merck, Kenneth Frazier, was the first executive to quit President Trump’s business councils after the events of last week (Photo: Evan Vucci, AP)

For a moment, you could hear the sighs of relief in boardrooms across America. The CEOs of blue chip firms such as General Motors, IBM, Johnson & Johnson and PepsiCo are no longer under the microscope for their response, or lack of, to the happenings in Charlottesville, Virginia last week. These executives were part of President Trump’s business advisory groups. To quote more on the story for those who haven’t been following the news, here’s the report from The Guardian:

Donald Trump was forced to disband two White House business councils that were disintegrating around him on Wednesday in the wake of his controversial remarks about the weekend violence in Charlottesville.

The Strategic and Policy Forum and the White House Manufacturing Jobs Initiative were both dissolved as corporate leaders continued to resign.

Trump claimed in a tweet that this was his decision, writing: “Rather than putting pressure on the businesspeople of the Manufacturing Council & Strategy & Policy Forum, I am ending both. Thank you all!”

The collapse of the advisory bodies follows seven different corporate leaders stepping down from the two councils in recent days including the CEOs of both Campbell’s Soup and 3M on Wednesday.

Trump had previously stated that resignations from both panels were of no consequence. “For every CEO that drops out of the Manufacturing Council, I have many to take their place. Grandstanders should not have gone on. JOBS!” he said on Twitter on Tuesday.

Wednesday’s abrupt decision came after Trump confidante Stephen Schwarzman, chief executive of the Blackstone Group, held a conference call for about a dozen members of the strategic and policy forum who decided to abandon it, the New York Times reported. Executives from the manufacturing council had been due to hold a similar call that afternoon, the paper added.

On Wednesday, corporate leaders who sat on the councils raced to denounce Trump’s comments about Charlottesville and to support the dissolution of the advisory bodies. Jamie Dimon, the CEO of JPMorgan and a member of Strategic and Policy Forum, said in a statement: “I strongly disagree with President Trump’s reaction to the events that took place in Charlottesville over the past several days.” He added that he agreed with the council’s decision to disband.

Jeffrey Immelt, the CEO of General Electric, who had previously said on Monday that he would not step down from the manufacturing advisory board, put out a statement on Wednesday afternoon announcing that he had resigned.

Three members of the manufacturing council resigned on Monday after Trump’s initial refusal to condemn the neo-Nazi and white supremacist protesters in Charlottesville by name. Two more followed on Tuesday after Trump defended some of the protestors in a press conference at Trump Tower. The president targeted one of the CEOs, Kenneth Frazier of Merck, in two tweetsincluding one where he mentioned Frazier, the lone African American CEO to step down, by name.

What is most striking about the events of last week was the slow reaction of these executives, particularly from firms who champion diversity and inclusion. Merck’s CEO, who was the first to act, felt compelled to leave the council due to a matter of personal conscience.

This was a minority opinion, and may CEOs were determined to remain, despite the President’s refusal to condemn extremist hate groups. To quote from the Washington Post, some, such as the four government contractors on the president’s advisory councils — Lockheed Martin, Boeing, Harris Corp. and United Technologies — waited until after the councils had disbanded to publicly weigh in, if they did at all. Even then, several stopped short of singling out the president for blaming “both sides” for the violence at a white supremacist rally this past weekend in Charlottesville.

One example was Lockheed Martin, which offered no public statement. The firm’s chief executive Marillyn A. Hewson sent a note to employees on Wednesday, hours before the councils were folded, explaining that she would remain a member because the group’s mission “remains critical to our business,” even as she insisted that “white supremists, neo-Nazis, and other hate groups have no place in our society.”

Other, such as PepsiCo’s Indra Nooyi, personally condemned the violence, but failed to act beyond that.

Michael Dell, chairman and CEO of Dell Technologies was unmoved, with his spokespeople telling the media that: “While we wouldn’t comment on any member’s personal decision, there’s no change in Dell engaging with the Trump administration and governments around the world to share our perspective on policy issues that affect our company, customers and employees.”

So, what was behind the inability to move? Did these executives believe that it was worth remaining to engage with a President whose position on the Charlottesville events has been condemned?

The best comment I read was shared by a communications colleague online (thank you Tim for this share). Corporate language consultant Michael Maslansky stated, “The era of the fence-sitter corporation is over. If you’re silent about an issue, then each side will assume you’re on the wrong side. You end up really having to choose.”

Corporate leaders have to choose; they can no longer sit on the fence. And they have to be prepared for the backlash, particularly from a President who takes anything and everything personally. Corporate leaders also need to act individually, as the CEO of Merck did – it’s telling that the CEOs who stuck it out decided to end the council via a conference call, preferring collective responsibility over personal ownership (which seems to be a habit of corporate life these days).

I hope those leaders who didn’t criticize what happened last week finally do so. Apple’s Tim Cook has been vocal about his position. It’s time to get off the fence people, and not only say what you believe in and advocate for as a company, but turn those words into actions.

Recycle Old News or Stick to Brand Values? How will firms deal with Trump?

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Trump’s Twitter attacks have targeted a number of firms. His behavior may not change when he takes up the Presidency today.

Trust me, it’s happening. Today, Donald Trump will be sworn in as President of the United States. And, judging by the past couple of months, Trump will personally run his agenda of making America great again across the entire business community. Shel Holtz has written a fantastic piece about the impact that Trump has when he Tweets about a company which he feels isn’t doing enough to support his American vision.

Companies will have two basic strategies to deal with this new type of political risk; they can either recycle old news, or they can resist Trump’s attacks, and fight back (yes, you read that right, brands will go up against Trump).

We’re already seeing firms come out with a raft of job announcements. This week General Motors said it would invest US$1 billion in its U.S. manufacturing operations, which will lead to the creation or retention of 1,500 jobs, adding that it would also add another 5,000 American jobs “over the next few years” in finance and advanced technology. Fulfilling another Trump pledge, GM announced that around 450 jobs will be returned to the US as GM transfers back parts production from Mexico.

Other firms have also put out jobs announcements. Amazon, whose founder Jeff Bezos publicly rowed with Trump during the election campaign, announced that it’d hire over 100,000 staff over the next 18 months. “It’s a very powerful headline, and the timing certainly makes Trump look good,” Ivan Feinseth, an analyst at Tigress Financial Partners LLC, told Bloomberg. “It’s going to happen in the first year and half of his administration. Bezos couldn’t have set him up any better to look good — timing is everything.”

China’s Alibaba has sought to allay Trump’s Chinese angst by promoting job creation in the US. Last week, Alibaba chairman Jack Ma met with the president-elect to tell him that the Chinese Internet giant would create 1 million jobs for Americans by helping small domestic businesses sell to Asian markets via Alibaba.

Job creation in the US is a tactic that many firms will seek to copy over the coming months as Trump takes charge. How many of these announcements will stack up, who knows. We’ll only know for sure after the space of months or years. However, many brands will be tempted to win favor with Trump’s administration and stay out of his crosshairs by pushing job news. The questions many will ask are, is the news real (for example, will Alibaba really be able to create a million jobs for Americans?), and is the news old? It’s been alleged that the GM announcement was planned as far back as 2014.

The other approach that companies will take is to stand up to Trump. Speaking to the San Francisco Chronicle, Richard Levick, president and CEO of the Levick public relations and communications firm explained why.

“Other companies will realize that the king doesn’t have a lot of clothing here,” he said. “At some point in the not too -distant future, a company will realize that there is greater value in being courageous and standing up to the president.”

To date, the best example of a brand fighting back against Trump is Vanity Fair. The publication, whose editor Graydon Carter has long been a critic, ran a piece in December last year titled, “Trump Grill Could Be The Worst Restaurant In America”. Needless to say, it didn’t go down well with the President-Elect.

The magazine responded  instantly, running a headline banner ad across its own and other sites entitled “The Magazine Donald Trump Doesn’t Want You to Read.” The result was 40,000 new subscribers.

“Vanity Fair played that perfectly,” Scott Farrell, an expert in crisis management and the president of Golin Corporate Communications, told the New York Times. “‘This was the magazine that Trump doesn’t want you to read.’ I think their response was consistent with the brand’s DNA.”

Firms will either have to proactively plan to put out information that will appeal to the new administration. Or they’ll have to plan on how to respond to a potential attach. Whatever they do, brands will have to move with speed, to counter Trump’s use of Twitter. Whichever route brands take, crisis comms experts (and the rest of us) are going to have an interesting four years. Unless someone turns off the WiFi in Trump Towers, that is.

Arab News, Molouk Ba-Isa, the Axact scandal and how the Arab media lost a world exclusive in 2009

Molouk Ba-Isa broke the Axact story five years before the New York Times. And then her story was pulled by the management of Arab News two weeks after it was published (image source: Saudi Gazette)

Molouk Ba-Isa broke the Axact story five years before the New York Times. And then her story was pulled by the management of Arab News two weeks after it was published (image source: Saudi Gazette)

While there’s plenty of media titles in the Middle East region – by all accounts the Gulf is the one part of the world where print is still making a profit – there’s few occasions I can remember where the region has had a world exclusive.

There’s always an exception to the rule, and unsurprisingly the person who has been in the limelight recently is a Saudi-based journalist called Molouk Ba-Isa. For those who know her, Molouk is a no-nonsense reporter who often tackles items of interest to her readers and who produces original news rather than copying and pasting news releases.

Molouk’s name was mentioned in the New York Times, as the journalist who first broke the Axact fake diploma scandal. To quote from the first piece the New York Times wrote on the story, in which it broke news of the scandal:

Heavy scrutiny by investigators, politicians and the fractious Pakistani media sector has mounted over the past week for Axact, a Karachi-based software company that has made millions selling fake degrees through a sprawling empire of school websites.

Axact, which has its headquarters in Karachi, Pakistan, ostensibly operates as a software company. Axact runs hundreds of websites, many of which purport to be online universities and high schools based in the United States.

Axact has thrived for more than a decade on its ability to hide links between its operation in Karachi and hundreds of fictitious online schools, many of them claiming to be American. But more such links are coming to light in the days since The New York Times published a detailed account of the company’s operations.

The Axact story wasn’t broken by the New York Times, but rather by Molouk Ba-Isa, who was writing for the Arab News back in 2009. Again, to quote from the New York Times:

For years, former employees said, Axact’s diploma certificates were shipped to customers across the globe through a courier service in Dubai, to give the impression of being based in that city’s free trade zone. But that facade nearly collapsed in 2009, when a technology journalist from Saudi Arabia started looking more closely.

The journalist, Molouk Ba-Isa, was following up on a report that Rochville University had awarded a master’s in business administration to an American pug named Chester. Although Rochville’s physical location was a mystery, Ms. Ba-Isa learned from a courier company official in Dubai that the degree originated from Axact’s office in Karachi.

But when The Arab News published her report, naming Axact, she said her editors received a strongly worded legal threat from company lawyers, and the article was removed from the Internet. This week, Ms. Ba-Isa said in an email that she felt vindicated.

In her weekly article for the Saudi Gazette, Molouk wrote about her Axact story which was published both in print and, even more importantly for a company which sells degrees via the internet, online.

On October 7, 2009, I received an email from Abdul Karim Khan & Company with a subject line “Cease and Desist.” The email was sent from akkc2005@yahoo.com, copied to legal@axact.com.

Abdul Karim Khan & Company, claimed to be “Advocates, Attorneys and Legal Consultants,” located at Suite No. 1108, 11th Floor, Kashif Centre, Sharah-e-Faisal, Karachi.

The email stated that the lawyers represented Axact (Pvt.) Ltd and they were putting forward a Cease and Desist Letter authored by Fahim ul Karim.

The letter demanded that the article published on October 6 be removed from arabnews.com or prosecution would proceed. Arab News was also included and threatened in the Cease and Desist Letter.

Immediately, I was asked by senior Arab News staff to provide evidence for all allegations in my report. I turned over my notes and the taped interview with Vicky Phillips, the founder of GetEducated.com, whose dog had been awarded the degree.

I provided telephone numbers for the shippers in Dubai and images of the shipping label. Within a week of the first email, the legal documents arrived from Pakistan to Jeddah by courier.

Once the article had been up on the website for two weeks, senior management at the newspaper made the decision to take the report down to stop any lawsuit.

However, no apology was issued and my report was never retracted. I continued to dig for information about Axact’s illegal activities.

While Molouk should be praised for her pioneering work, why didn’t the management at Arab News and its publisher defend her reporting and keep it online? Did they really fear a court case? Do they bear responsibility for those who have been defrauded by Axact in the five years since that initial piece was published by Molouk? And what does this say about investigative journalist in the Middle East?

A global scoop which never was… Molouk, you did a fantastic job. If only our publishers are as brave as our journalists, maybe this piece would have had a different ending. Ultimately, I’ll leave the last word to Molouk.

My thanks go out to all those who have helped to publicize Axact’s alleged malfeasance. Keep up the good work.

The New York Times looks to Arabic, Al-Sharq Al-Awsat goes Chinese

The New York Times’ Mark Thompson expects the newspaper to focus more on the Middle East next year; Al-Sharq Al-Awsat is moving further east, to China (image source: http://english.alarabiya.net)

All eyes in the media world seem to be looking East. First, at the Abu Dhabi Media Summit, we had New York Times Company chief executive Mark Thompson talking about how the New York Times is looking to print and report in additional languages next year (the paper currently publishes in English and Chinese). Speaking to Al Arabiya News, Thompson spelt out his vision for the New York Times and its relationship with the Middle East.

“We will look at other languages and obviously Arabic is on this list. We would not want to do anything that was not very high quality, and it’s got to make economic sense.”

“The appeal of the Middle East – whether we do an Arabic edition or not – is that it is a big region which necessarily, because of the extremely complex and unstable politics of the wider region, is fascinated by news,” he added.

“We also believe that a lot of people would be interested in other perspectives. For the really international news brands the Middle East is an opportunity you cannot ignore.”

Not to be outdone, one of the region’s largest and most respected newspapers is looking to launch its own Chinese version of the newspaper online. Al-Sharq Al-Awsat already publishes in both English and Arabic and has numerous apps and digital editions in addition to its online portal and hard copy – its Android app has around 25,000 unique users on a daily basis, and I’m sure its applications on the iPhone and iPad have the same amount, if not more, readers.

What is fascinating is Al-Sharq’s focus on Asia. The newspaper, which claims a daily circulation of 230,000 copies, is looking to establish itself in and around the largest economies in Asia. As part of this drive, the newspaper’s editorial management is looking to print in Mandarin Chinese. With Saudi’s increasing focus on Asia (the newspaper is owned by a Saudi-listed company), the move to publish in Chinese makes sense. Will other Arab newspapers follow suit?

The silent expatriate guests – should we raise our voices or remain quiet on sensitive subjects?

Should we as expatriates remain silent or speak up about issues which we feel are contrary to our beliefs? (image source: http://www.thewordontheword.blogspot.com/)

The past week has been an interesting one for foreign media junkies who follow affairs in the Gulf. Two articles were published in the English-speaking press which have proved to be controversial. The first was a damning piece in the New York Times on labor rights for workers hired from the Asian sub-continent to build the New York University Abu Dhabi. The second was a fine piece of investigative journalism from the Sydney Morning Herald on the subject of government subsidies for Etihad, the Abu Dhabi-owned airline.

The above criticisms in the foreign media shouldn’t surprise experienced communications professionals. Etihad is becoming a global brand with stakes in a number of airlines across Europe and Australia. Similarly, the report about labour issues relates to an American institution, New York University, and its Abu Dhabi campus. Qatar has similarly experienced negative publicity from abroad relating to the country’s labour practices following its winning of the rights to host the 2022 World Cup.

Recently, I attended a conference on the subject of corporate social responsibility. When asked about whether expatriates should tackle these issues with both governments and the national population, one of the most senior communications professionals in the region responded by saying ‘we’re the guests and so we shouldn’t tackle these issues.’

Unfortunately, the most common refrain to any comment which can be taken in a negative light is, ‘if you don’t like it, then leave.’ There’s a lack of moral courage shown by many expatriates to talk about issues which may offend, or which may get them into the bad books. Similarly, are many nationals willing to listen to the opinions of others? The concept of traditional Arabian hospitality is often talked about, a tradition that requires the host to listen to and honour the guest, but the reality on the ground is often different.

Modern societies are mature enough to take on board different voices, to learn from the opinions of others. As a person who has tried to do his part for the rights of others, I do find it embarrassing that as the people who live here in the region, we’re unable to raise these issues with our hosts in a civilized dialogue (and for those who say I’m looking to impose foreign, western standards there are many hadiths or sayings of the Prophet pbuh on issues such as workers’ rights).

Should we have the moral courage to speak on these issues, to benefit the communities and the countries with which and in which we live? Or should we remain silent? The answer, to me at least, is obvious. What do you say?