Metro-North Accident Kills Six

Another Metro-North train accident caused several deaths-this time a collision with an SUV on the tracks in Valhalla, NY. It's unclear why Ellen Brody's car stopped in the train's path, and the driver behind her didn't understand why she didn't back up.

As with other Metro-North incidents, the organization provides service updates, but little human connection. The Metro-North news page only references a collision and provides transportation options. The Twitter feed also posts only service updates.

The MTA CEO did issue this statement: "The entire MTA family's thoughts are with the relatives and loved ones of the victims of last night's tragedy. We are tremendously saddened by this tragic accident, and our thoughts and prayers go out to all of them."

But the MTA press releases are cold statements of the facts:

Discussion Starters:

• Should the MTA do anything differently at this point? To be fair, this accident seems out of the organization's control, unlike the derailment in 2013.
• Compare the New York MTA's response to DC's statement when a woman died of smoke inhalation. What's different? Should the MTA write a similar apology?

Lululemon Founder Resigns

After a series of controversial PR moves, Lululemon Founder and CEO Chip Wilson has resigned from the board of directors. BizCom has two posts about the company over the past couple of years: 

• Lululemon Offends Again
• Can Lululemon Do Anything Right?

The problems seemed to start when customers complained about the sheer fabric used in the company's pricey yoga pants. The New York Times explains the situation: 

Some women who tried to return the pants at Lululemon stores said they were told to put them on and bend over so staff members could determine just how see-through they were. After a monthslong public-relations disaster, Wilson, who was chairman of the company, went on Bloomberg TV that November to share what he thought was a reasonable explanation. "Some women's bodies don't work for the pants," he said. "It's really about the rubbing through the thighs, how much pressure is there over a period of time."

In a video in 2013, Wilson tried to apologize, but it didn't go very well. The Times writer describes Wilson: "More than once, the way Wilson spoke reminded me of the airhead fashion model Ben Stiller plays in "Zoolander."

Here's an excerpt from the company's news release about Wilson: 

Mr. Wilson concluded: "I have achieved the goals I set when I came back, and after careful thought, I believe that now is the right time to step away from the board. I leave behind a new and talented management team and new board construct. By stepping away from lululemon I will now have more opportunity to work with my wife and son as they grow their new business, Kit & Ace. I am so excited for Kit & Ace because it is where street clothing is going. Shannon and JJ have caught the next wave." Founded in 2014, Kit & Ace produces Technical Luxury™ products by using Technical Cashmere™ blends.

Image source.

Discussion Starters: 

• Read the NY Times article about Chip Wilson. What impressions do you get of the man and the situation?
• Read the entire news release. Analyze the tone, organization, and word choice. How is the company representing the situation? 

Nationwide Ads

In a series of commercials, some of which played during the Super Bowl, Nationwide is encouraging parents to keep their kids safe. In each video, children are telling us that they can't do what they had hoped to do because they died.

Frank Eliason, a father who lost his child of four years old during a liver transplant, wrote a post describing how the ad affected him:

Let me introduce you to Gia. She was born in 2000. She never learned to ride a bike. Or got cooties. She never learned to fly. Or travel the world with her best friend. She will never get married. She didn't grow up, because she died during a liver transplant surgery as a result of liver cancer. She passed away on July 26, 2004.

Imagine Gia was your daughter. It is easy for me, because she is my daughter. Now we are over 10 years later, and I still think of her everyday. Now imagine escaping this troubled world for a few hours to enjoy the Super Bowl. It is an escape that only comes once a year. I enjoy watching the game with my girls, and try to forget the troubles the world brings. Then this commercial comes on:

How would you feel if you lost a child for any reason? Can you imagine the discussion it creates with your other children who are 7 & 8 about the sibling they never met? Simply put this brought nothing but pain to parents who lost a child, no matter the cause of death.

I know Nationwide has issued a statement stating that they were hoping to start a dialogue regarding safety in the home. That may be a noble goal, but this is not the way to start a dialogue of any kind. It is obvious to me that no one involved within the company or their advertising agency has ever suffered such a horrible loss. I certainly hope they never do.

Insurance is supposed to be about making you whole, but there is no insurance in the world that can ever make the loss of a child whole. In my view this commercial was much more than a downer, as the Washington Post stated. To me it was personal.

Here's Nationwide's press release:

 

Columbus, Ohio - Preventable injuries around the home are the leading cause of childhood deaths in America. Most people don't know that. Nationwide ran an ad during the Super Bowl that started a fierce conversation. The sole purpose of this message was to start a conversation, not sell insurance. We want to build awareness of an issue that is near and dear to all of us-the safety and well being of our children. We knew the ad would spur a variety of reactions. In fact, thousands of people visited MakeSafeHappen.com, a new website to help educate parents and caregivers with information and resources in an effort to make their homes safer and avoid a potential injury or death. Nationwide has been working with experts for more than 60 years to make homes safer. While some did not care for the ad, we hope it served to begin a dialogue to make safe happen for children everywhere.

In an unrelated Nationwide video, actress Mindy Kaling thinks she's invisible. This one's funny.

Discussion Starters:

• Do you find Nationwide's commercials offensive or insensitive?
• Assess the company's press release. Did it convey Nationwide's goals while recognizing intense reactions?

McDonald's Latest Emotional Appeal

In yet another attempt to win customers and stave off declining revenue, McDonald's created a clever ad for Game Day. The company's Super Bowl ad is called Pay with Lovin'. If you're one of the lucky few to be selected through February 14, you'll get a free item by, for example, calling your mother to tell her you love her, dancing, or hugging someone.  

A McDonald's spokesperson said, "We want to thank our customers for making our day and hopefully they will make someone else's as well-that's what Lovin' is all about. From selfies, hugs to high fives-we have a bunch of fun ways to express your Lovin'."

Also this week, McDonald's CEO has "retired."

Discussion Starters: 

• What do you think of the ad and the marketing strategy?
• What other ideas do you have for McDonald's? How else can the company lure customers to the restaurants with emotional appeal?

Taco Bell Pays Conan O'Brien to Poke Fun

Why would a company hire Conan O'Brien to call a brick "the first experimental taco"? The late-night TV host is known for his "spontaneous," "awkward" humor, and his pitch for Taco Bell is no different.

In a nearly 10-minute video watched on YouTube by 1.4 million people, O'Brien brings the head of his IT department to Taco Bell headquarters for a full tour. They learn some history, watch people taste-testing food, and try new products. After eating a casa lupa, which O'Brien says sounds like a "case of lupus," he fakes a seizure. 

The video is on Conan's site but at the end reads: "Paid Consideration Provided by Taco Bell Corp." 

Discussion Starters:

• How effective is this Taco Bell promotion? What works well?
• Do you find it deceiving, or should people know that it's essentially a paid advertisement?

Adidas CEO Defends His Job

Facing criticism about the future of Adidas, CEO Herbert Hainer won't step down. In an article in a German newspaper, Hainer admitted to losing sales to Nike and said "Suddenly, everything that was right for 12 years, was wrong."

Hainer has been CEO since 2001, and a succession plan is in progress, but some investors want to see a change sooner than 2017, when his contract ends. Pressure started back in September, when the company saw declining sales in soccer and Reebok products and after the stock had dropped 38% for the year.

Hainer admits mistakes in investing in the soccer market but says, "If I no longer had the ambition and the energy, and the firm belief that I can bring the company further forward, then I would stop immediately."

Image source.

Discussion Starters:

• What's your view of Hainer's decision to speak with the German newspaper? What other options does he have for conveying his point of view?
• How do you think the Board feels about Hainer's position and his comments to the newspaper?
• Do you find Hainer's comments convincing?

TurboTax Apologizes for Change

TurboTax changed its software and didn't communicate the decision as well as it could have. People rely on the program to do their own taxes rather than hiring an accountant. But the company omitted some forms, and users didn't realize until they starting working in the system. 

General Manager Sasan Goodarzi is front and center-including this photo- in the apology that was distributed by email to TurboTax registered users.

Download full TurboTax apology.

Discussion Starters: 

• What principles of business writing does Goodarzi use in his statement? Particularly consider the organization: how is the statement structured, and how does he organize each paragraph? 
• How effective is his apology? What might users appreciate, and what could further anger them?

DC MTA Apologizes for a Death

Unlike the NY-area MTA when a train derailment killed four people, the Washington, DC, MTA is doing the right thing: apologizing for a death. Smoke filled a subway car, and officials later described communication with emergency personnel as "ineffective or sporadic."

One woman died, and about 80 riders were hospitalized. Some riders say they were trapped for more than 30 minutes before being rescued. Passengers tried to revive the 61-year-old Carol Inman Glover but were unsuccessful. 

A report by the Fire and Medical Emergency Services department details the incident, including transcripts of 911 calls. 

The MTA's apology is interesting in light of pending lawsuits, a common reason for organizations to avoid such displays of humanity. 

Discussion Starters: 

• Analyze the statement: the choice of a full-page ad in the Washington Post, the word choice, etc. 
• What principles of report writing from Chapter 10 does the department use in the report? What could improve the report?
• Read the emails and 911 communications in the report. Any surprises?

McDonald's "Signs" Campaign

McDonald's is trying another tact for improving business. The latest marketing campaign, "Signs," shows the company standing by the community in times of tragedy. 

McDonald's is certainly taking different approaches from simply promoting the taste of its food. The previous campaign focused on how food is made-an attempt at transparency, which worked for some but not everyone. The same could be said of this one. 

Steve McKee, president of an ad agency in Albuquerque, complimented the approach: "I thought the ad was awesome. It's clear that all the billboards were real. It was demonstrating that McDonald's is Americana." Some say the ads distinguish McDonald's from Wendy's, Chipotle, and Burger King, which couldn't make such claims.

But others say the company is capitalizing on tragedy. And of course, any campaign is an opportunity for ridicule. 

Discussion Starters: 

• Describe the ad strategy. What objectives is McDonald's trying to achieve?
• What's your view of the campaign: tasteless, clever, or something else?

Honda Responds to $70 Million Fine

Honda has been fined a record $70 million for not reporting 1,729 injuries and deaths to The National Highway Traffic Safety Administration (NHTSA). The amount is twice what GM was fined when it failed to report 40 deaths because of ignition issues. 

In a press statement, Honda blamed data entry and other errors for the reporting failure and promised to take "corrective measures":

Honda Resolves NHTSA Inquiry Regarding Early Warning Reporting

TORRANCE, Calif., Jan. 8, 2015 – American Honda Motor Co., Inc. ("Honda") has entered into an agreement with the National Highway Traffic Safety Administration (NHTSA) to resolve the government's inquiry into Honda's early warning reporting as required by the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act. As part of the Consent Order, Honda will pay a $70 million civil penalty and continue to implement a series of corrective measures among other requirements.

"We have resolved this matter and will move forward to build on the important actions Honda has already taken to address our past shortcomings in early warning reporting," said Rick Schostek, executive vice president, Honda North America, Inc. "We continue to fully cooperate with NHTSA to achieve greater transparency and to further enhance our reporting practices."

In order to ensure full compliance with its early warning reporting obligations, Honda has already begun taking steps to correct the errors responsible for the violations. The company is in the process of initiating new training regimens, changing internal reporting policy, making staffing and organizational changes, and enhancing oversight of its early warning reporting process.

The settlement agreement follows Honda's November 24, 2014 response to a Special Order issued by NHTSA in early November. That order was prompted by Honda's disclosure t NHTSA of preliminary findings from a third-party audit Honda commissioned in September 2014 in response to inadequately addressed discrepancies in the company's early warning reporting. In responding to the Special Order, as previously disclosed, Honda identified under-reporting of written claims or notices of injuries or deaths over the past decade due to errors related to data entry, computer coding, regulatory interpretation, and other errors in warranty and property damage claims reporting.

Discussion Starters: 

• Assess Honda's statement. What works well to explain the company's position, and what could be improved? 
• Do you buy Honda's explanation of the reporting failures? 

Marriott's Response to Wi-Fi Criticism

Marriott has been criticized for blocking guests' personal Wi-Fi connections, and the company petitioned to the Federal Communications Commission (FCC) for permission to use jammers. The request is still pending, but the FCC recently fined a Nashville Marriott for preventing guests' access to their own hotspots.

Critics say that Marriott wants to continue charging fees for Internet access while guests should be able to bring their own access. Conference guests, particularly, sometimes prefer their own hotspot to ensure a faster connection when multiple users are on simultaneously. But in a statement on its website, Marriott explains the company's position as a security issue rather than a way to control access:

12/30/2014

Marriott's Response to FCC Petition Filing

We understand there have been concerns regarding our position on the FCC petition filing, perhaps due to a lack of clarity about the issue. To set the record straight it has never been nor will it ever be Marriott's policy to limit our guests' ability to access the Internet by all available means, including through the use of personal Mi-Fi and/or Wi-Fi devices. As a matter of fact, we invite and encourage our guests to use these Internet connectivity devices in our hotels. To be clear, this matter does not involve in any way Wi-Fi access in hotel guestrooms or lobby spaces.

The question at hand is what measures a network operator can take to detect and contain rogue and imposter Wi-Fi hotspots used in our meeting and conference spaces that pose a security threat to meeting or conference attendees or cause interference to the conference guest wireless network.

In light of the increased use of wireless technology to launch cyber-attacks and purposefully disrupt hotel networks, Marriott along with the American Hotel & Lodging Association on behalf of the entire hotel industry is seeking clarity from the FCC regarding what lawful measures a network operator can take to prevent such attacks from occurring. We feel this is extremely important as we are increasingly being asked what measures we take to protect our conference and meeting guests and the conference groups that are using Wi-Fi technology in our hotels.

The FCC is accepting comments about the situation.

Discussion Starters: 

• Marriott's statement has lots of qualifiers, such as, "To set the record straight," "As a matter of fact," and "To be clear." What do you make of these phrases? 
  
• Should Marriott say more about the situation? The company denied comment for a Huffington Post article. 

Ogilvy Apologizes for Distasteful Ad

Ad agency Ogilvy & Mather has apologized for an offensive ad produced for Kurl-on, an Indian mattress company. What could go wrong when portraying a 14-year-old Taliban shooting victim in a cartoon? 

The company wanted to show that heroic figures "bounce back," but the ad doesn't quite work. The New York Times describes Malala Yousafzai, featured in the promotion: 

"At the age of 11, Malala Yousafzai took on the Taliban by giving voice to her dreams. As turbaned fighters swept through her town in northwestern Pakistan in 2009, the tiny schoolgirl spoke out about her passion for education - she wanted to become a doctor, she said - and became a symbol of defiance against Taliban subjugation."

Two other ads in the series aren't much better. Steve Jobs is shown pushed out a door, and Gandhi is thrown from a moving train. 

Before this one hit paid media outlets, online news organizations flagged the image. Although Kurl-on hasn't responded to inquiries, Ogilvy issued this statement: 

"We deeply regret this incident and want to apologize to Malala Yousafzai and her family. We are investigating how our standards were compromised in this case and will take whatever corrective action is necessary."

Discussion Starters: 

• How do Kurl-on and Ogilvy share responsibility for the ad? How did this happen? 
• The ad was created in Ogilvy's Indian office and produced in a Chilean studio. How, if at all, do these facts affect your thinking about the ad?

AirAsia CEO Apologizes for Lost Flight

In a news conference, CEO Tony Fernandes apologizes to the families of victims of the lost AirAsia flight. Fernandes responds to questions about the cause and compensation generally, but promises not to "run away from our obligations or hide behind any conventions. We will be there for the staff. . . [correction] for the families, even after all of this is over." 

The Washington Post describes Fernandes as "a flamboyant Malaysian-born, British-educated former Warner Music executive, [who] had dreamed of operating his own budget airline since he was in school." He describes the lost flight as a "scar with me for the rest of my life."

The airline is suffering further embarrassment because of an in-flight magazine ad that bragged about the pilots' superior training: "well prepared to ensure [their] plane will never get lost." The article was published soon after the disappearance of Malaysia Airlines flight MH370.

Discussion Starters: 

• Assess the news conference. How well did Fernandes handle the questions? 
• At some point, he says that having families where they are trying to evacuate will "complicate" the process. What's your view of this statement?

Sears CEO Explains Store Closings

Our local Ithaca, NY, Sears store closed last month-one of more than 200 in 2014. Sears Holdings Co. CEO Eddie Lampert explained the decision in a post on the company's website. Part of his message is about keeping underperforming stores open as long as possible:

"I am proud of the work associates contribute to serve our members in all of our stores and believe that the decision to keep some of our worst performing stores open in the past, despite their low or negative levels of profit, was the right one because we kept people employed and served our members. We have experimented with different formats, different levels of investment and different processes to bring about a better result. Given changing circumstances, both in the retail industry and in our company, we can no longer afford, nor justify keeping these stores open."

In a second blog post a day earlier, Lampert writes, "Is something a 'failure' if other successes come from it?" He responds to a Crain's Chicago Business article that criticized Sears for being too merchandise-driven when it needs to evolve as a market-driven company. 

"Success takes both hard work and a willingness to keep what works and adjust what doesn't based upon what our members want. This is what we and our competitors needed to do back in 1988. It's what so many people across our company are doing today, and it's how we are going to bring Sears and Kmart forward into tomorrow."

If nothing else, Lambert's determination shows in the number of his blog posts. Between 2005 and 2013, he wrote no more than three posts per year. In 2014, he's blogging between two and nine times a month.  

Image source. 

Discussion Starters: 

• How does Lambert use principles of persuasion discussed in Chapter 7 in his "Moving Forward" post about the store closings? 
• Compare Lambert's early posts on the blog (2005 and 2006) with his most recent. What differences do you notice, and how can you account for them? 

McDonald's Latest Food Video

The latest McDonald's video describing how its food is made features Chicken McNuggets. Part of the series, "Our Food, Your Questions," the video shows the ingredients and process of making this popular McDonald's item.  

McDonald's sales continue to falter. Although better than some analysts' projections last month, the company has been losing revenue. This campaign is an attempt at transparency-to address customers' long-standing questions openly and directly. So far, the results are questionable.

Discussion Starters: 

• What's your view of the latest video? What is effective and what is ineffective in conveying McDonald's message? 
• How, if at all, does the video change your view of Chicken McNuggets? 
• What else could the company do to improve the image of its food?

Walgreens Pulls Swastika Wrapping Paper

Would you like swastikas with your Hanukkah wrapping paper? Traditionally, blue-colored wrapping paper would be used for Hanukkah gifts, but paper at Walgreens, part of a Hannukah display, includes a pattern that few Jews would appreciate. 

A Walgreens representative said, "We are in the process of removing the product from our stores," but the company made no other comment about the design. A Hallmark statement acknowledged that the paper "has an unintentional offensive background image" and a representative said, "We sincerely apologize for this oversight and for (the) unintended offense."

Discussion Starters: 

• How does a mistake like this happen? 
• Hallmark says the image is "unintentional" and the offense is "unintended." Do you buy it? 
• What else, if anything, should Walgreens and Hallmark do? 

Rolling Stone Is Sorry for Its Apology

After its article about rape at the University of Virginia, Rolling Stone has made a couple of apologies. The article described a gang rape at a fraternity and other issues of sexual assault on campus. Since it was published, the Washington Post found some discrepancies in the story.

In a statement, the fraternity disputed some of the allegations and connections. They denied having a social event during the weekend in question, found no member of the fraternity working where the victim claims to have met him, and affirmed its commitment to the university's code regarding pledge initiation: 

"Third, our Chapter's pledging and initiation periods, as required by the University and Inter-Fraternity Council, take place solely in the spring semester and not in the fall semester. We document the initiation of new members at the end of each spring. Moreover, no ritualized sexual assault is part of our pledging or initiation process. This notion is vile, and we vehemently refute this claim."

Rolling Stone Managing Editor Will Dana responded, at first, rather strongly.

"In the face of new information, there now appear to be discrepancies in Jackie's account, and we have come to the conclusion that our trust in her was misplaced. We were trying to be sensitive to the unfair shame and humiliation many women feel after a sexual assault and now regret the decision to not contact the alleged perpetrators to get their account. We are taking this seriously and apologize to anyone who was affected by the story."

Subsequently, the magazine issued a statement describing its reporting process in more detail and expressing regret for granting the victim's request to not speak with the alleged assailants. The tone is softer and accepts more of the responsibility rather than blaming Jackie's trustworthiness: "These mistakes are on Rolling Stone, not on Jackie."

Letters and articles in UVA's Cavalier Daily give us a window into discussions on campus about the story.

Discussion Starters:

• After reading the Rolling Stone and Washington Post articles, what's your view of the story? How
• Read a few letters and articles in Cavalier Daily. How do these shape your thinking about the Rolling Stone story?

Gap's Failed "Dress Normal" Campaign

Business Insider blames Gap's declining sales on its failed "Dress Normal" campaign. Created by agency Wieden+Kennedy, the ads feature celebrities and push the notion of normal as an individual belief.

According to Gap's press release, "the campaign is rooted in the same core values the brand has unapologetically stood for over the past 45 years – individualism and the liberation that comes from confidently being your most authentic self. Dress Normal boldly instructs individuals to shape their own authentic, personal style – and intentionally challenges every one of us to dress for ourselves."

Criticism started when the campaign was announced and continues today, as Gap sales dropped 4%, in November compared to a 2% increase this time last year. Writers and analysts called the campaign "blah" and "too normal."

Maybe the campaign failed because people couldn't stand the bad grammar.

Discussion Starters:

• What's your view of the campaign? Read the press release and look at a few of the photos.
• Am I being too picky about the grammar? 

Staffer Resigns After Comments About Obama Girls

A Republican staffer made negative comments about President Obama's teenage girls, apologized, and resigned. Elizabeth Lauten, communications director for a Tennessee representative, posted on her Facebook page during the annual White House turkey-pardoning event:

"Dear Sasha and Malia, I get you're both in those awful teen years, but you're a part of the First Family, try showing a little class. At least respect the part you play. Then again your mother and father don't respect their positions very much, or the nation for that matter, so I'm guessing you're coming up a little short in the ‘good role model' department. Nevertheless, stretch yourself. Rise to the occasion. Act like being in the White House matters to you. Dress like you deserve respect, not a spot at a bar. And certainly don't make faces during televised public events."

Video of the event shows the girls at the president's side during his speech and the traditional turkey-pardoning.

A Forbes writer criticized Lauten, noting that the event is silly, and the girls acted as expected: as awkward teenagers embarrassed by their father's "dad-jokes." Elisa Doucette also questioned Lauten's apology.

 According to Doucette, this would have been a better apology:

I wanted to take a moment and apologize to Sasha and Malia Obama for a post I made on Facebook earlier today judging them at the annual White House turkey pardoning ceremony:

When I first posted on Facebook I reacted to an article and I quickly judged the two young ladies in a way that I would never have wanted to be judged myself as a teenager. After many hours of prayer, talking to my parents, and re-reading my words online I can see more clearly just how hurtful my words were. Please know, those judgmental feelings truly have no place in my heart. Furthermore, I'd like to apologize to all of those who I have hurt and offended with my words, and I pledge to learn and grow (and I assure you I have) from this experience.

Discussion Starters:

• After watching the video, what's your view of the girls' behavior? Are Lauten's comments justified?
• Compare Doucette's revised apology to Lauten's. What differences do you notice? What principles of business communication does Doucette suggest?

Takata CEO "doesn't view this as a crisis..."

According to business associates of Takata CEO Shigehisa Takada, he is calm and doesn't consider the airbag situation a crisis. Although at least five people were killed, eight were seriously injured, and millions of cars were recalled as a result of Takata's faulty airbags, the third-generation CEO doesn't seem overly concerned. 

The company is being sued, and executives answered tough questions at a Senate Hearing recently. All signs point to a crisis. But, according to a Business Insider article, three people who spoke with Takada thought he denied the gravity of the situation. As one said, "He acts like this recall is going to blow by in due time and harbors little sense of crisis." Another said, "He's a nice man, very sincere and seemingly capable, but he doesn't view this as a crisis spiraling out of control." 

In part, the article blames pressure from the large automakers, pressure from lawyers, and pressure from a former, powerful Takata executive, Takada's mother: "Imagine being her son and trying to exercise leadership with her buzzing around you. He's paralyzed to make decisions on his own."

Image source. 

Discussion Starters: 

• Does Takada need to act differently? Should he be more visible? 
• Describe possible pressure from clients, such as Toyota and Honda. What are their concerns in this mess? 
• What about attorneys? What are their concerns for the company?