All in Messaging

Newcastle United FC is a storied franchise in English football and 'my club' in the sense that I was born a Geordie (the name used to describe people from the northeast of England) and therefore am genetically predisposed to being a member of The Toon Army, as frustrating as that can be. My father (long deceased) was a friend of one of the team's legends, Jackie Milburn ('Wor Jackie' as he is known), from when they both lived in Ashington in the 1940s.

This past season was a disaster for the club, with managers changing three times during a 38-game season and poor performances on the field by highly paid "stars'. The result is an ignominious demotion to the Coca-Cola Championship from the Barclays Premier League (where such other well-known franchises as Manchester United, Chelsea, Arsenal and Liverpool play).

The owner -- Mike Ashley, who has been problematic, if not a disaster, from the beginning according to most reports -- has been trying to sell the club since at least the last day of the Premiership season. It is now being coached by an interim manager.The players are furious and many of the first string players are asking for transfers. Even Ashley admits he has made a mess of things: “It has been catastrophic for everybody. I’ve lost my money and I’ve made terrible decisions. Now I want to sell it as soon as I can."

I have watched the public relations calamity unfold online on an almost daily basis through news reports from British newspapers and the NUFC's website (which tends to report absolutely zilch about what is going on). The extraordinary thing is that management appears to be saying naught. News reports are based almost exclusively on comments by players or "sources' close to the club.

From what I can tell, management has said nothing to reassure the city of Newcastle nor the club's extraordinarily devoted fans that the coming season in the lower division will be nothing short of a debacle. No reassurances are being given; no sympathy expressed; no plans outlined; no time frames given; no deadlines offered . . . in other words, completely counter to basic crisis communications principles.

Okay, maybe management doesn't see the situation as a crisis. Maybe management's solicitors or investment bankers have said it must say nothing. Maybe it is sending out news updates that no news outlet is picking up. Maybe it has a social network, YouTube channel, blog or Twitter presence which I just haven't been able to find. Or maybe management simply doesn't recognize the damage that is being done to its reputation.

The supporters will be there for the players on the pitch when the dust settles: but when Geordies are called on to support an NUFC management business initiative, when the city is asked for a concession or a tax, or when the club's history is written, who will be there to defend management's interest and its "license to operate" the Geordies' club?

I was delighted to discover today that McKinsey & Company agrees with me about the reputation challenges facing companies globally and the new approaches needed to meet those challenges.

Okay, maybe I am not given credit anywhere in the McKinsey Quarterly article called Rebuilding corporate reputations (registration required). Yes, I know others have been saying the same thing for a number of years. And native humility prevents me from claiming anything more about my contribution to these discussions among public affairs specialists. But it was satisfying nonetheless to read that the consultants in McKinsey & Company's strategy practice ALSO agree there are three changes profoundly altering the reputation management landscape:

"Those changes include the growing importance of Web-based participatory media, the increasing significance of non-governmental organizations (NGOs) and other third parties, and declining trust in advertising."

Add to this the recognition in the report that traditional media relations strategies alone are simply inadequate to deal with dispersed opinion shaping never mind stakeholder expectations for participation, dialogue and transparency, and you have the skeleton of most of what many of us who advise companies on reputation management have been clamoring about for a number of years.

Perhaps now that McKinsey & Company has said it senior executives will be more disposed to our strategies.

Philip Sheppard, a past president of the International Public Relations Association, brought to my attention this exhilarating and numbing video called Did You KNow? posted on the Pilot Theatre (from Wakefield West Yorkshire) website . . . Lots to make you think about business, communications, knowledge management and North American education (strengths and failures).

The stock of CSX Corp., a Jacksonville Florida-based railway company has been discounted as a result of lingering criticism of "poor management", according to UBS analyst Rick Paterson as reported today in the Financial Post. (I can't find a link: The Financial Post's website doesn't make it easy.) It should be trading at a premium to its competitors according to Paterson.

He goes on to say "Four or five years ago that ("poor management") was probably true, but we think these days are long gone and (mis)perception is lagging reality."

If that's the case (and I have no idea if the company has been actively trying to restore its reputation), then why is it that investment bankers and equity analysts stubbornly resist the idea that a good reputation, consciously developed, nurtured and communicated, can have a measurable impact on valuation? And why is it that some companies have such a hard time understanding that reputations don't recover solely through solid financial performance?

There are strategies for reputation recovery. But they require commitment, humility and honesty . . . and the support of financial advisers, lenders and legal counsel.

I have no idea if this post from Molly Wood truly reflects Apple's approach to public relations ("hammer and hammer and hammer and hammer"), or if it is just the usual journalistic hectoring of public relations people doing their job.

But the pull-out quotation from the Wall Street Journal that prompted the piece demonstrates why many business people (and the demos at large) occasionally -- okay, often -- question the devotion of journalists to seeking truth from facts. Since the WSJ article uses as its source "people familiar with the matter", "these people say" and "they say" it is also fair game to conjecture, as The Molly does, whether the publication has been spun by a zealous public relations "machine".

The blame, though isn't with the public relations people, as Wood accedes, but with lame and now inadequately supported journalism:

"It’s not a crime for a company to have a good PR machine. It’s working for Apple and it has for a long time. But this is a nation that is, at the moment, finding itself in quite a pickle because we blindly believed everything that companies were telling us. So, if we’re trying to be skeptical about, say, large financial institutions and their outlandish and/or reassuring claims, shouldn’t we also cast the same critical eye on a convenient flood of information that does little other than improve Apple’s stock price a week before they have to answer to angry and worried shareholders? Or, hey, maybe the Wall Street Journal just trying to boost the Nasdaq on purpose. You know, to help the economy."

Maple Leaf Foods (not a client) today launched a blog in response to the 2008 Listeria deaths caused by eating its deli meats and, as with much of how the company handled the crisis, it is a very good model for the language and tone of effective messaging . . . frank, honest and contrite. (Although its design is quite lackluster.)

The first post is by CEO Michael McCain and here is how it begins: "Since August 2008 twenty-one Canadians have died after eating Maple Leaf deli meats contaminated with Listeria.  We all watched in horror as the worst food safety crisis in modern Canadian history rolled across the country." Now that's frank and the antithesis of how many companies begin apologies after serious events.

Later in the post Mr. McCain writes "This was by far the most awful event in the one hundred year history of our company.  I can’t properly describe the overwhelming sense of grief and responsibility we all felt … I felt, personally (emphasis added).  You may remember seeing me on television back then, apologizing for the tragedy and vowing to develop the most comprehensive anti-Listeria program of any food company in Canada." He then goes on to outline in details the changes Maple Leaf has made to reduce Listeria findings in its plants.

Even more significant he actually raises three subsequent issues related to Maple Leaf Foods' safety performance that most people had likely forgotten.

Textbook . . .

Buried in a recent survey of corporate directors conducted by McKinsey is a finding that 29% of respondents report that one of the procedural changes corporate boards are making to deal with economic turmoil is "Promoting conversations that are more frank than usual"; further, 24% believe this is an additional change boards should make "to become more effective in managing the global economic crisis".

No mention is made of whether Twitter is a preferred tool for intermediating this new focus on conversation.

Ontario quietly passed Bill 108, the Apology Act, yesterday . . . although for some reason media coverage has been very limited and more detailed information doesn't seem to be available on the website of the Ontario Ministry of the Attorney-General.

According to soonews.ca, "The legislation would allow an individual or organization to offer an apology as part of the dispute resolution process without concern over legal liability. The Apology Act provides that an apology made in relation to a civil matter does not constitute an admission of fault or liability and would not be admissible in a civil proceeding."

What coverage there is focuses on the impact of the Act in particular on medical and other professionals and how it may assist in dispute resolution.

The important question is whether the Act will encourage legal counsel in Ontario to be more flexible in their advice to companies on what they can and can't say when their products or services cause harm. Is it too much to hope that this may open the door for companies to consider more active reputation defense strategies -- starting with expressions of regret and compassion -- rather than relying only on legal-driven refusals to comment for fear of legal liability?

What I like about Sun Life Financial Inc. giving shareholders an advisory vote on executive compensation (joining seven other Canadian financial institutions including most of the large banks, although not Toronto-Dominion Bank and Manulife Financial Corp.)is that the company has evidently recognized something has to be done by business to rebuild shareholder and public trust.

Since the Enron years, most polling acknowledges a steady decline in trust in business and financial institutions. Any doubts about the extent of the decline are obviated when you look at the results of a recent Harris Poll:

"Those who think 'most people on Wall Street would be willing to break the law if they believed that they could make a lot of money and get away with it' are up to 71%. The highest number previously was 64% in 1996"

True, this is Wall Street we are talking about, ground zero for dishonest and manipulative practices in investment and compensation strategies. But mistrust is becoming indiscriminate and ubiquitous.

There are those who think this trust deficit is temporary, a function of the economic tsunami hitting global finance. Once things go back to "normal", the argument goes, the pressure for greater transparency in compensation policies and increased board oversight will whither away in a sea of fatter profits.

Ian Davis, worldwide managing director of McKinsey, arguing the contrary, is closer to the truth: He has written a piece called 'The New Normal' in which he forecasts that:

". . . around the world governments will be calling the shots in sectors (such as debt insurance) that were once only lightly regulated. They will also be demanding new levels of transparency and disclosure for investment vehicles such as hedge funds and getting involved in decisions that were once the sole province of corporate boards, including executive compensation."

This will be the new normal, and without actions similar to that of Sun Life and the seven other Canadian financial institutions increased shareholder activism, loud public displeasure, media sniping, punishment by consumers and abrupt regulation will surely follow.

Spirited debates happen all the time when people talk about corporate responsibility (CR) especially now that our economies are stumbling along and evidence continues to leak out about the governance missteps that led to egregious examples of greed-driven shortsightedness.

Research studies and white papers on the subject also proliferate, at least as fast and as often as politicians blaming their predecessors for current problems.

Here are a few that have made their appearance recently:

  • The Conference Board released the results of a survey yesterday on the future of corporate giving programs. Corporate giving officers are noticing their companies are concerned about their overall financial health when considering the allotment of their philanthropy dollars. Not surprising. But remember, public expectations about behavior -- and the punishment it inflicts on transgressors -- are not significantly influenced by random acts of kindness no matter how generous or strategic.
  • Yesterday, the Rotman/AIC Institute for Corporate Citizenship also released what it calls "a real-world guide that helps business leaders understand and prioritize key social and environmental issues and identify opportunities as well as potential risks." Called 'What's a CEO to do?", it is described as a toolkit and is built on a model introduced by Rotman School of Management dean, Roger Martin, called the "virtue matrix" which he wrote about in HBR a few  years ago. I haven't had a chance yet to do a deep dive into it, but Rotman often produces worthwhile management frameworks. (Disclosure . . . I have an M.B.A. from Rotman.)
  • The third is truly timely . . . an article in the Deloitte Review called "The Responsible and Sustainable Board. (Sorry I can't find a link to it but it is Issue #4, 2009). It includes a warning to boards of directors that "Even if your organization is disinclined to tackle CR&S issues voluntarily, you may ultimately have no choice if, as expected, regulatory requirements take hold." 

Maybe there will be some kind of retrenchment back into the philosophy of 'the business of business is business'. (Simply wishful thinking on the part of cave-dwellers?) Evidently though it doesn't stop the think tanks from thinking about it.

Since I have such respect for the quality of writing and ideas (although not always the politics) in the British magazine The Spectator, I am always delighted when the point of view of an editor or writer corresponds to my own. (I am not foolish enough to think there is any correlation between the two other than coincidence).

So imagine my contentment in reading the February 14th number when both the lead editorial and a column by Sarah Standing echoed comments I have posted here and here over the past few weeks.

Sarah Standing on saying sorry:

" 'Sorry' has lost its mojo for me, it's gone mainstream. It's one of those words that began life as a covetable Chanel handbag only to end up as a worthless flake flogged on eBay . . . I no longer believe in all these force-fed public apologies. They're starting to sound very hollow . . . I'm old school and from where I stand a true apology should come from the heart."

And not, I would add, because a crisis communications or political consultant has said it is necessary to apologize when harm has been caused. Without sincerity an apology is nothing more than gamesmanship. 

The editorial 'Bonus Points' calls out many British bankers for the damage caused by the huge payouts they received, which lead as the editors conclude to the wrong balancing of risk and reward

"Bankers must face reality and bring about changes themselves, rather than trying to face down public disgust with a last-ditch defence of the status quo. Their profession has to revert to being dull but respectable, decently but not lavishly paid, transparent in its accounting practices and the way it measures profits, intelligently regulated, and by nature risk-averse. And if that means talented people drift away from the banking sector, so be it: there are plenty of other parts of the economy that urgently need them".

Better said than by me, but at least my ideas are in line with some top notch writers.

It should be unnecessary after so many years of the corporate responsibility (CR) "movement" -- if it is right to call it that -- to have to jump to its defense and provide arguments for why CR makes a difference. But the harrumphing of the troglodytes has started again, this time under the pretext of determining whether our wretched global economy will cause companies to re-think CR actions and investments.

In one of those dismissive, glib pieces favored by business journalists when writing about CR, Stefan Stern of the Financial Times (registration required) writes from Davos "Thank goodness, now the recession’s here we can forget all that nonsense about corporate social responsibility (CSR) and get back to trying to make some money." Canada's own Terence Corcoran followed suit in his remarks to a recent panel on CR reported in one of Canada's national newspapers.

Communications professional Paul Seaman takes up the discussion in his blog and comes down somewhere in between supporting the preeminent goal of business to make profit yet recognizing that "Traditional values and professional ethics will become highly valued virtues and the true measure of corporate responsibility."

More often than not, the critics use ideology rather than evidence to back up their arguments. They ignore books like Lynn Sharp Paine's exhaustive study of the financial benefits of responsible conduct called Value Shift (Sharp Paine is the John G. McLean professor of business administration at Harvard Business School), or a recent study published in MIT's Sloan Management Review called Does it Pay to be Good? The conclusion of this study by two professors at Canada's Ivey School of Business about consumer behaviour and sustainability:

"Yes customers will pay a premium for ethically produced goods. Conversely, they will punish companies (by demanding a lower price) that are not seen as ethical. The punishment exacted is greater than the premium customers are willing to pay. Companies need to be 100% ethical to be rewarded."

Detractors like Stern and David Henderson (author of Misguided Virtue: False Notions of Corporate Social Responsibility) also don't seem to be able to make the connection between the frequent lapses in ethical judgment of some senior executives and the idea that "profit" at any cost -- without the filter of some moral or ethical framework (a basic tenet of corporate responsibility especially as it relates to governance)-- can be a precursor to greed. And look at what unrestrained greed has wrought today.

Will there be a step back from good governance, social engagement, committed citizenship, defense of human rights, product innovation driven by environmental concerns, willing social and environmental problem identification and resolution, and efforts by companies to control their GHG emissions? I doubt it. Why would companies set aside years of building reputation capital (an intangible with enormous financial value) for a short-term retreat from responsible conduct? Why would senior executives look on now as an appropriate time to set aside public concerns, when trust in many of them has eroded even further over the past six months and led to precipitous government and regulatory action?

Bruce Sewell, posting on Intel's CSR blog from Davos, (disclosure . . . my company's client although I don't work on the account) made this observation about the mood of the meetings: "Gone was the patina of entitlement, replaced instead with a palpable sense that at some profound level this collection of bankers, regulators and politicians had failed to read the writing on the wall, and for that omission the world as we know it will pay a stiff price."

The CR "movement" can only benefit from a flight from entitlement, from some sense of guilt about transgressions, from a recognition that a "stiff price" may be exacted from those who don't take care to act responsibly . . . or are dismissive.

It had to happen . . . the navel gazing about the impact of Twitter on journalism is now in full Zen musing. Rob Paterson at Fast Forward points out that Chris Cillizza at the Washington Post is now twittering the White House. David Schlesinger of Reuters has been sending tweets from Davos and inquiring about its impact on the future of journalism

Athough I like what Schlesinger has to say ("I have little patience for those who cling to sentimental (and frankly inaccurate) memories of the good old halcyon days of journalism that were somehow purer and better than a world where tweets and blogs compete with news wires and newspapers."), the question for me about whether tweeting can be journalism . . . It's Who cares?

When you have 142 characters to say what you want, there is little to distinguish the tweets of social media consultant Rahaf Harfoush from Davos from those of Schlesinger, except Harfoush's tweets are more fun.

When it comes to following Twitter reports of events, the question is who is the best eyewitness. If the real events at Davos are happening in plenaries and in conversations in the halls, bars and restaurants -- and not in staged news conferences -- then the more witty, insightful and diagnostic witness, whose point of view is closest to 'mine', and who is the one moreover ready to respond to an @ reply, is going to get the tweet "readership" . . . journalist or not.

By the way, although Cillizza has about 2000 followers on Twitter, he follows only six. I guess others who might Twitter about White House proceedings (and may not be journalists) must not have anything interesting to say. Doesn't that speak much about the myopia of some journalists who use social media tools?

With all the parsing of the implied criticisms of George Bush in Barack Obama's inaugural address, few  noticed the VISUAL affect of the cameras lingering over the outgoing president's departure.

An acquaintance of mine who runs a public relations agency in Paris, Christophe Ginisty, noticed this about the long goodbye to Bush and read into it an oblique (or stage managed?) wish to demonstrate that Obama's inauguration finally brings to an end eight years of "cauchemardesques" (nightmares):

"Le deuxième élément est la longueur de la séquence qui a accompagné Bush dans son départ. D'habitude, les télévisions se concentrent assez peu sur le sortant. On voit la sortie, on s'attarde sur la poignée de main, le départ de la limousine (ou de l'hélicoptère) et puis on revient au nouveau Président. Hier, j'ai trouvé que les télévisions avaient vraiment consacré du temps au départ de Bush, comme s'il était aussi important de montrer que ce sinistre chef d'état partait bel est bien, que c'en était vraiment fini de ces huit années cauchemardesques."


Imagery can be telling, whether planned or not.

Gal_bartz Carol Bartz, the new CEO of Yahoo, has started the public facing aspect of her job on the right foot.

The New York Time reports today that Bartz believes "that Yahoo had some great assets that 'frankly, could use a little management' and that she would "spend her first few days at Yahoo talking to employees and customers, not to investors or reporters."

According to TechCrunch, she also said "It’s been too crazy. People outside Yahoo deciding what Yahoo should do, shouldn’t do. That’s got to stop."

Blunt, decisive, transparent and evidently a  CEO with her audiences properly ranked.

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(This picture is mine . . . taken in Paris behind Les Halles. I find it gentle and thoughtful.)

I wonder if popular trust in business may be taking a bad rap. Or, rather, I would ask the question whether our current lack of faith -- or trust -- in Wall Street, Bay Street, the U.S. Treasury Secretary Henry Paulson, Fed chairman Ben Bernanke and our own Canadian financial leaders is in danger of being projected on to any business leader who misses a forecast or suffers a poor quarter?

Writing today in The Globe and Mail, columnist Derek DeCloet says:

"In 2008, skeptics, doomsayers and non-believers on Wall Street and Bay Street were vindicated. This was not because the wizards of finance proved to be corrupt or dishonest (though there were enough accusations of that - Bernard Madoff's alleged monstrous Ponzi scheme being merely the worst). Nor was it because the Street's paid gurus made big mistakes. Errant forecasts by professional soothsayers are expected. What was so surprising is that the people closer to the action - the ones at the top of the world's largest banks and corporations - proved, time and again, to have so little idea of what was just around the corner. Most of them wildly underestimated the depth of the financial rot and economic dysfunction. Publicly, they appeared too complacent, especially before September." 

DeCloet is, of course, right about the surprising lack of foresight (although some say it is willful "blindness" in the face of friends all around them making astonishing money) among financial leaders in North America and Europe.

But we should be careful not to attribute this same obduracy to CEOs in other sectors who have a good sense of their competitive and market frameworks, who look clearly at the impact of exogenous factors like commodity prices and currency fluctuations and who, therefore, revise forecasts more frequently than shareholders might like.

If they are forthright, honest and clear in their analysis, humble about what they don't know or can't predict, and willing to shoulder responsibility for what they can control (and bypass the rich bonus when they fail), then they and their companies are deserving of our trust. And, perhaps humility about what is unknown, and candor in the expression of that ignorance, is something the wizards of Wall Street -- and many politicians -- can learn from the best leaders in the manufacturing and commodity sectors.

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Permit a diversion from my usual focus on the intangibles of organizational reputation and the particular influence of social media on the way we think, campaign and work. (Although at a stretch you could say the comments below are related to the quality and impact of messaging.)

Put simply, I think grammar is important. No surprise to those who have listened to me rail against, for example, the use of 'invite', a verb, as a noun, as in 'I will send you an invite' when it should be 'I will send you an invitation'. It's just one example of the illiteracy to which the English language has been subjected as a consequence of the educated allowing any stupid expression into the language because it is purportedly colloquial (read . . . often heard among shop clerks.)

Of course, I make mistakes in grammar more frequently than I want to. But I am delighted to be corrected. My point here, though, is that we should care. As for why, I came across an eloquent defence of the importance of grammar in Muriel Barbery's intelligent novel The Elegance of the Hedgehog.

Here is what her character, the precocious twelve-year-old Paloma Josse, has to say about the beauty of grammar: 

"Personally I think that grammar is a way to attain beauty. When you speak, or read, or write, you can tell if you've said or read or written a fine sentence. You can recognize a well-turned phrase or an elegant style. But when you are applying the rules of grammar skillfully, you ascend to another level of the beauty of language. When you use grammar you peel back the layers, to see how it is all put together, see it quite naked, in a way. And that's where it becomes wonderful, because you say to yourself 'Look how well-made this is, how well-constructed it is! How solid and ingenuous, rich and subtle" 

It is humiliating being Canadian these days as we watch our political troglodytes braying in the House of Commons about who among their pathetic ranks are the more Machiavellian . . . those who precipitated this crisis of governance with an a-historic economic outlook and stupidly timed partisan assault, or the coalition of the dispossessed who must have been licking its lips at the opportunity provided to gain power through the callousness of the governing party.

Why "callousness"? Because people struggling in dark times have no need of hyper-partisan gamesmanship. They need leadership, and this is as true of a CEO as it is of a prime minister or backbencher. And if there is evidence of leadership in our politics today, I can't find it.

There are lessons in this mess for CEOs I think.

Leadership is about humility, responsibility, putting the future of the whole (the demos in politics; customers, communities, employees and ALL shareholders in business) ahead of petty ambition and partisan concerns or, in business terms, ahead of quarterly earnings expectations for example.

Leadership is about being a servant to a greater good, and not a master of self-interest. Abraham Lincoln once said "Nearly all men can stand adversity. But if you want to test a man's character - give him power." The character of our political "leadership" has been recently tested with power and it has been found profoundly wanting: The character of some global  business leaders has also been examined (and has some tough tests yet to come) and it too has been found deficient in too many ways.

Take a look at what French philosopher Bernard Henri-Levy said about his friend, the French president Nicholas Sarkozy, in his latest book called Left in Dark Times:

"Now I hear the clannish, feudal, possibly brutal Sarkozy that his opponents denounced, and which I never wanted to believe in: a man with a warrior vision of politics, who hystericizes (sic) relations, believes those who aren't with him are against him, who doesn't care about ideas, who thinks interpersonal relations and friendship are the only things that matter."

Now think about leaders in politics (even in some businesses) today in Canada . . . profoundly wanting indeed.

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Although it may appear counterintuitive when the economy seems totally derailed, the most successful companies use turbulence as a time to acquire undervalued assets.

A McKinsey study (requires registration) of 200 companies released in September of this year found that "The best growth companies take a different approach. They view the downturn as a time to increase their leads and make acquisitions. They pounce on the opportunities it creates with an alacrity that is the stuff of legends: think of GE's speedy dispatch of deal makers to Asia after the financial markets took a downturn in 1998."

Here are some other things to think about:

A company that approaches a downturn with laser focus on what will create value for shareholders in the long-run may see better returns, but will most certainly have that opportunity-hunting personality accrue to its reputation account. Why? Because investors reward confidence and foresight. As the McKinsey authors put it "countercyclical investment can separate the leaders from the also-rans." 

Confident companies that target undervalued assets must still plan for post-acquisition integration. It is common knowledge now that most acquisitions and mergers fail to realize the anticipated value because the after-deal integration is so badly managed. In the haste to acquire and demonstrate a willingness to take countercyclical risk, companies must still have a well thought out internal communication plan to ensure the newly acquired operations add value, again for the long run.

Markets (and even analysts) won't intuitively recognize the value of an acquisition, and may even be doubtful because the business crowd is standing still waiting for 'better times'. The case has to be made immediately, publicly and continuously that the risk of acquiring in a downturn is outweighed by the upside of significant future value to shareholders. That means using all the tools in the communications arsenal to position the deal in this way . . . including web, social and mainstream media strategies.