Target's Latest Communication with Customers

Target had to take some responsibility for the security breach that affected millions of customers.  A New York Times investigation reported that, "cybersecurity and credit experts and consumers shows that Target's system was particularly vulnerable to attack. It was remarkably open, experts say, which enabled hackers to wander from system to system, scooping up batches of information."

This is the latest email to customers. Download the email. See previous messages.

Discussion Starters:

• Assess Target's email in terms of audience perspective, organization, content, word choice, and so on. What works well, and what could be improved?
• Write another communication for Target-one that would have been sent in December when the breach was first discovered.

No Apology About the Metro-North Derailment?

Metro-North is communicating little since a railroad from Poughkeepsie, NY, to Grand Central Station, NYC, derailed, leaving 67 people injured and 4 dead-and an apology doesn't seem forthcoming. No where online does the organization seem to show remorse or any emotion for the impact on people. 

Metropolitan Transit Authority (MTA) communications have been paltry, focusing on service issues alone. I suspect the organization is operating under old-school rules, with lawyers cautioning against an apology for fear of admitting guilt. If this is the case, it's a strange mindset: it's unlikely the passengers are responsible in some way, and we know that the train was traveling 82 m.p.h. on a curve with a 30 m.p.h. limit. Signs are pointing towards a sleeping conductor, and lawsuits have already been filed. Why doesn't the MTA do the right thing and show some remorse?

The Metropolitan Transportation Authority(MTA) website is a curious mix of Christmas tidings, service announcements, coupons, and hidden messages. Under the "Transparency" tab on site, under the title "Current News," we see the latest articles, including December 2, when the accident occured:

Wednesday, December 4, 2013 - 18:43
MTA Metro-North Railroad Announces Full Hudson Line Service Thursday

Wednesday, December 4, 2013 - 15:12
See A Christmas Story,The Musical with LIRR

Wednesday, December 4, 2013 - 15:06
LIRR Gets You to Radio City's Christmas Spectacular

Wednesday, December 4, 2013 - 14:53
Our Gift to You – Coupon Savings!

Wednesday, December 4, 2013 - 13:52
Metro-North Crews Rebuild Spuyten Duyvil Tracks

Tuesday, December 3, 2013 - 15:03
Six Lanes For Holiday Travelers At Bronx-Whitestone

Monday, December 2, 2013 - 10:21
Metro-North Hudson Line Service Alert

The article on December 2, "Metro-North Hudson Line Service Alert" is where we find the news. But the bad news is assumed (never previously announced) in the first paragraph and then introduced, oddly, in the ninth paragraph. No mention is made of the 11 critical injuries and four deaths caused by the accident:

Following Sunday's derailment of a Hudson Line train in the Bronx, MTA Metro-North Railroad is operating limited service on the Hudson Line between Poughkeepsie and Yonkers. For travel to Manhattan, customers can catch a shuttle bus at the Yonkers Station to connect with the 242nd Street terminus of the Broadway 1 Subway Line Icon local subway.

New York City Subways will operate two additional 1 Subway Line Icon local trains per hour during the peak periods.

Hudson Line will continue to be cross-honored on the subway.

Many of the 26,000 people who use the Hudson Line on an average weekday are encouraged to ride the Harlem Line as an alternative.

People who do not have to travel are urged to telecommute. People should expect crowded trains.
In cooperation with Westchester and Putnam counties and local municipalities, special parking is being arranged to accommodate additional drivers at the Southeast Station at the northern terminus of the Harlem line and at KensicoDam, which is in walking distance to the Valhalla station.  Riders should consult mta.info for additional information on the continuing repair effort and service restoration.

Metro-North Customer Service representatives will be on hand to assist customers in making the transfers.

Cranes and other special heavy equipment are being positioned to remove the rail cars from the area so that repairs can begin. The equipment will arrive this evening begin work following clearance from the NTSB and work will continue through the night.

The accident occurred just before 7:30 a.m. on Sunday, a southbound, Hudson Line train with about 120 passengers on board derailed just north of the Spuyten Duyvil station in the Bronx. All cars derailed.

The National Transportation Safety Board sent a team of investigators who arrived on Sunday and immediately began documenting the scene.  Metro-North is cooperating fully with that investigation. With NTSB approval, Metro-North workers will begin clearing the cars, using cranes and heavy equipment.

Customers are advised to check the website for the latest service updates.

A Twitter search for an apology revealed nothing. Metro-North tweeted a flurry of apologies about service failures before the accident, and one rider posted an MTA text message apologizing for service back in August.

 

A NY Daily News article from November 11 tells us we should expect nothing like an apology:

"The MTA doesn't issue an apology when someone is hit by a subway train - and it doesn't whip out the checkbook, either.

"About 90% of the 92 "man-under" lawsuits that were resolved in the last five years ended in the Metropolitan Transportation Authority's favor, according to a breakdown by the MTA.

"The MTA didn't pay a dime in 73 of those cases. It dispensed with another nine cases with paltry go-away payments averaging $40,000, according to the authority's information. Five big cases did result in payoffs totaling $33 million. . . ."

Between Sunday, when the accident occurred, and today, Thursday, at noon, Metro-North tweeted about 85 times. Three of those tweets apologize only for service issues.

The only hint of humanity seems to be in this tweet:

Discussion Starters:

• How is the MTA different from other organizations we have seen apologize over the past several years?
• What is the legal perspective on apologies? How can a management team effectively balance this with humanity?
• Draft a tweet, news release, and email to victims' families to apologize for the derailment.

Yale Communicates During "Lockdown"

Yale University had a communication challenge after a threatening phone call caused a campus lockdown. A student reported that his roommate was planning to go to campus with a gun. Later, the police interviewed a witness who saw someone with a "long gun." The call turned out to be a hoax, and reports of someone with a gun could have been a police officer, who were making their way to the scene.

Still, the university sprung into action, possibly with concerns about another Virginia Tech or Sandy Hook shooting. The university policy department provided updates on its Facebook Page.

 

Appropriate for crisis communications, these bad-news messages use the direct style: the main point is right up front.

Now, on Yale's Emergency Management site, we see no mention of a potential gunman. Likely the university would like to see the entire incident go away.

Discussion Starters:

• Look for other university communications about the incident. What else can you find? 
• Although I can't find the email on the web, the articles reference one sent from the university to students and parents. What do you think was included in the message? Draft a possible outline of the email. 

AOL CEO Fires Employee During a Conference Call

Tim Armstrong, AOL CEO, may have acted impulsively during a conference call when he terminated an employee on the spot. Frustrated with Patch, a division of AOL that hosts websites with local news and information, Armstrong was explaining the future of Patch to about 1,000 employees. Part of the plan is to reduce the number of sites from 900 to 600.

At about 2:00 into this clip, Armstrong tells Abel Lenz, Patch's creative director, to "put that camera down." Apparently, Lenz regularly recorded meetings and posted pictures on AOL's intranet. Then Armstrong said, "Abel, you're fired. Out." After a few seconds of silence, Armstrong continued, "If you guys think that AOL has not been committed to Patch, and won't stay committed to Patch, you're wrong. The company has spent hundreds of millions of dollars, the board of directors is committed, I'm committed...."

According to sources, the call lasted one hour and forty minutes; it's unclear at what point during the call this segment took place.

SFGate explains Armstrong's position:

"A few minutes later, Armstrong complained about leaks to the media. He said the leaks were making Patch seem like 'loser-ville' in the press.

"He said, 'That's why Abel was fired. We can't have people that are in the locker room giving the game plan away.'"

Lenz has been quiet about the incident. He gave a "No comment" response to PR Daily and told Jim Romenesko, "I appreciate the interest, Jim, but I have nothing to share. Go Patch!"

Two days later, Armstrong sent this email to all AOL staff: 

AOLers -

I am writing you to acknowledge the mistake I made last Friday during the Patch all-hands meeting when I publicly fired Abel Lenz. It was an emotional response at the start of a difficult discussion dealing with many people's careers and livelihoods. I am the CEO and leader of the organization, and I take that responsibility seriously. We talk a lot about accountability and I am accountable for the way I handled the situation, and at a human level it was unfair to Abel. I've communicated to him directly and apologized for the way the matter was handled at the meeting.

My action was driven by the desire to openly communicate with over a thousand Patch employees across the US. The meeting on Friday was the second all-hands we had run that week and people came to Friday's meeting knowing we would be openly discussing some of the potential changes needed at Patch. As you know, I am a firm believer in open meetings, open Q&A, and this level of transparency requires trust across AOL. Internal meetings of a confidential nature should not be filmed or recorded so that our employees can feel free to discuss all topics openly. Abel had been told previously not to record a confidential meeting, and he repeated that behavior on Friday, which drove my actions.

We have been through many difficult situations in turning around AOL and I have done my best to make the best decisions in the long-term interest of the employees and the company. On Friday I acted too quickly and I learned a tremendous lesson and I wanted you to hear that directly from me.

We have tough decisions and work to do on Patch, but we're doing them thoughtfully and as openly as we can. At AOL, we had strong earnings last week and we're adding one of the best companies in the world to the team. AOL is in a great position, and we'll keep moving forward.

Discussion Starters:

• Defend Armstrong's actions. What else could be happening at the company to justify the firing?
• What are the potential dangers of an employee intranet site, where news and other company information is shared among employees?
• How do you asssess Armstrong's email to staff? What works well, and what could be improved?

Set Up for Disappointment at the Daily Voice

At the Daily Voice, a group of local-news websites, we see another example of how the indirect style is ill conceived in bad-news messages. Based on this Friday email, would employees expect layoffs on Monday? Carll Tucker is the company chairman, and Zohar Yardeni was the CEO, who recently resigned.

 

On Monday, the good news came: all 11 of the company's Massachusetts sites would be closed, and major layoffs would take place in Connecticut and New York.

Sounds like bad news to me.

Gawker offered this advice:

"...we would not advise applying for one of the Town Reporter positions currently posted on the Daily Voice's site. If the phone interview goes well, they'll bring you in the next day to punch you in the face."

Discussion Starters:

• What is a better approach for the news of layoffs?
• When is it appropriate to use the indirect style for bad-new messages?

Fired Groupon CEO's "Just Kidding" Email

It's not every day that a terminated CEO writes "just kidding" in his final email to employees. Firedafter annoucing more disappointing quarterly results, Groupon founder and CEO Andrew Mason tweeted a link to the full email on Jottit himself, noting, "(This is for Groupon employees, but I'm posting it publicly since it will leak anyway)."

In the memo to employees, Mason explains how he feels leaving he company he started:

People of Groupon,

After four and a half intense and wonderful years as CEO of Groupon, I've decided that I'd like to spend more time with my family. Just kidding - I was fired today. If you're wondering why... you haven't been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that's hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.

You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I'm getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we've shared over the last few months, and I've never seen you working together more effectively as a global company - it's time to give Groupon a relief valve from the public noise.

For those who are concerned about me, please don't be - I love Groupon, and I'm terribly proud of what we've created. I'm OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I'll now take some time to decompress (FYI I'm looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I'll figure out how to channel this experience into something productive.

If there's one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what's best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness - don't waste the opportunity!

I will miss you terribly.

Love,

Andrew

A New York Times blog entry noted a "trend toward bluntness": 

"It was inevitable that this trend toward bluntness would arise in the tech world, where failure is seen above all as an opportunity for spiritual growth."

Discussion Starters:

• What's your view of a CEO's posting internal bad-news messages online? Consider another recent examples: RealNetwork's layoff memo. What are the arguments for and against the decision?
• Assess Mason's email to employees. If you worked for Groupon from the early days, how do you think you might react? How would you feel about continuing to work for the company?

Yahoo! Email: No More Working from Home

New Yahoo! CEO Marissa Mayer is making her mark, but she's ruffling a few feathers. In an email to employees, HR head Jackie Reses asks "all employees with work-from-home arrangements to work in Yahoo! offices." As expected, remote employees aren't too happy about the change.

YAHOO! PROPRIETARY AND CONFIDENTIAL INFORMATION - DO NOT FORWARD

Yahoos,

Over the past few months, we have introduced a number of great benefits and tools to make us more productive, efficient and fun. With the introduction of initiatives like FYI, Goals and PB&J, we want everyone to participate in our culture and contribute to the positive momentum. From Sunnyvale to Santa Monica, Bangalore to Beijing - I think we can all feel the energy and buzz in our offices.

To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.

Beginning in June, we're asking all employees with work-from-home arrangements to work in Yahoo! offices. If this impacts you, your management has already been in touch with next steps. And, for the rest of us who occasionally have to stay home for the cable guy, please use your best judgment in the spirit of collaboration. Being a Yahoo isn't just about your day-to-day job, it is about the interactions and experiences that are only possible in our offices.

Thanks to all of you, we've already made remarkable progress as a company - and the best is yet to come.

Jackie

Hundreds of Yahoo! employees currently are working remotely, including customer service representatives and workers who don't have a Yahoo! office close by.

After a series of layoffs, Yahoo! may be taking a different approach to reducing headcount and increasing productivity. Some speculate that employees who can't or won't make the change will quit, making reductions easy.

Yahoo! responded to the controversy with only these statements:

• "This isn't a broad industry view on working from home. This is about what is right for Yahoo right now."
• "We don't discuss internal matters."

The email inspired a wave of articles, include a Wall Street Journal cover story covering the number of people, benefits, and possible career derailment from working remotely.

Image source.

Discussion Starters:

• How would you describe the tone and approach of the Yahoo! email?
• Yahoo! management clearly didn't want the email to be released. What, if anything, could have prevented this?  What's your reaction to employees' forwarding the message: are they justified, acting inappropriately, or something else? Why would an employee forward an email that's marked "proprietary and confidential"?

Employee Live Tweets During Layoffs at HMV

Note to companies: Maintain control of your Twitter feed, particularly in tough times. At British Electronics company HMV, an employee "live tweeted" during layoffs.

 

We can understand the marketing director's wanting to stop the tweets, but it sounds funny for him to ask, "How do I shut down Twitter?" That's like wanting to stop Facebook. We've all had that dream.

When the company reclaimed control over the feed (I'm not sure how), they tweeted this response:

Discussion Starters:

• How could HMV have prevented the Twitter feed from being hijacked? Should management have anticipated this, or is that too much to expect?
• How do you assess the company's response? What, if anything, should management have done differently?

Citi Lays Off 11,000 and Blunders Press Release

Someone needs a better editor-and a heart. To announce 11,000 employee layoffs, Citi issued a press release titled, "Citigroup Announces Repositioning Actions to Further Reduce Expenses and Improve Efficiency." "Repositioning" appears 17 times in the release.

Sure, layoffs usually are good news for Wall Street, but the real damage is the layoffs, not mentioned until late in the release and suspiciously absent from the three lines summarizing the statement up front:

• Fourth quarter 2012 pre-tax charges to total approximately $1 billion
• Approximately $900 million of expense savings expected to benefit 2013 results
• Projected annual expense savings to exceed $1.1 billion beginning in 2014

The quote from new CEO Michael Corbat is a real tear-jerker, too:

"These actions are logical next steps in Citi's transformation. While we are committed to – and our strategy continues to leverage – our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns. And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate or simplifying our operations."

Although companies may justify jargon as required for the Securities Exchange Commission (SEC), they are free to craft messages any way they would like. Companies need to be smarter about their audiences, knowing that employees likely will read their press releases.

Assignment Ideas:

• Read the entire press release. Identify all of the verbs that can be improved. Also look for nominalizations, and change these nouns and adjectives to strong verbs.
• Rewrite the press release. What improvements can you make to the text and the CEO's quote?

No More Twinkies?

Hostess Brands announced that the company will close, primarily because of labor issues. In a statement, the company blames a union strike for dooming the maker of beloved Ho Ho's, Ding Dongs, Sno Balls, and Twinkies.

CEO Gregory F. Rayburn said the company doesn't have the "financial resources to weather an extended nationwide strike." The company statement emphasizes challenges and concessions already made: 

"Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs. The offer to the BCTGM included wage, benefit and work rule concessions but also gave Hostess Brands' 12 unions a 25 percent ownership stake in the company, representation on its Board of Directors and $100 million in reorganized Hostess Brands' debt."

Although Hostess' 18,500 employees, understandably, are upset with the decision, some say the pay cuts were intolerable: "The point is the jobs they're offering us aren't worth saving."

Critics of the decision also cite post-bankruptcy-filing executive pay increases between 75 and 85%.

If you want a Twinkie badly enough, you can get a whole box on eBay for a mere $200,000 (starting bid). But some hope the brands will be bought, so the Twinkie may live on, after all.

Discussion Starters:

• Analyze the company's statement in terms of structure, content choices, and tone. What works well, and what could be improved? (Download the statement.)
• What persuasive strategies do you identify in the statement? Are you convinced that Hostess made the right decision?

Nestle Recalls Chocolate Powder

Nestle has voluntarily recalled its powder used to make hot chocolate because of a possible Salmonella risk. Although no illnesses have been reported, the company is taking precautions because its supplier of calcium carbonate, an ingredient in the mix, announced a recall.

On its website, Nestle posted this statement about the decision:

At the end of its recall notice posted on the FDA website, the company apologized:

"Nestlé is dedicated to the health and safety of its consumers. For these reasons, the company initiated this voluntary recall. We apologize to our consumers and sincerely regret any inconvenience created by this incident."

Discussion Starters:

• After reading the recall notice, would you avoid similar products, or are you convinced that this is an isolated event?
• As of this writing, Nestle hasn't posted anything on its Facebook page. Why do you think that is? Is that a good decision?

Raymour and Flanigan Updates Customers

Furniture store Raymour and Flanigan sent an email to update customers on how Hurricane Sandy is affecting operations. Appropriately, the email begins with empathy for those affected by the storm. 

 

But buried in the middle of the third paragraph is perhaps what many customers most want to know: "We will continue to do our best to respond to each and every inquiry and keep you informed." The company acknowledges, "We have received many calls, emails, and social media posts from our valued customers, inquiring about deliveries and when stores will be open again." Are many outstanding? Perhaps a separate email could be sent to people who are waiting for a response, (although the company does sound strapped for resources).

The company's Twitter feed seems disconnected from this email. Other than this one tweet, between October 29 and November 6, no other tweet mentions the storm or its impact on operations:

Discussion Starters:

• What similar emails did you receive from companies during the storm? How do they compare to Raymour and Flanigan's?
• What else, if anything, should Raymour and Flanigan tweet during this time?

Turnabout on NYC Marathon Decision

Hopeful NYC Marathon runners received the bad news: the 2012 Marathon has been cancelled. This reverses Mayor Bloomberg's decision announced during the week.

The initial decision to continue the marathon received harsh criticism, with New Yorkers concerned that resources needed to rebuild the city after Hurricane Sandy would be redirected to the event. Organizers of the marathon became increasingly concerned about divisiveness over the decision and announced a cancellation, after all.

George Hirsch, chairman of the board of Road Runners, which oversees the marathon said, "The marathon is about uniting the city. But all it was doing was dividing it. Is that what the New York City Marathon is all about? No, not at all."

In an email, the Road Runners organization explained the decision. The positioning is interesting and a topic of criticism on Twitter: organizers defend the initial decision and blame the media and controversy in forcing the decision:

It is with heavy hearts that we share the news that the 2012 ING New York City Marathon has been canceled.

The decision was made after it became increasingly apparent that the people of our city and the surrounding tri-state area were still struggling to recover from the damage wrought by the recent extreme weather conditions. That struggle, fueled by the resulting extensive and growing media coverage antagonistic to the marathon and its participants, created conditions that raised concern for the safety of both those working to produce the event and its participants. While holding the race would not have required diverting resources from the recovery effort, it became clear that the apparent widespread perception to the contrary had become the source of controversy and division. Neither NYRR nor the City could allow a controversy over the marathon to result in a dangerous situation or to distract attention from all the critically important work that is being done to help New York City recover from the storm. 

NYRR, in partnership with the Rudin Family and the ING Foundation, has established the "Race to Recover" Marathon Fund to aid New Yorkers impacted by the storm. Over $2.6 million has been raised, including a $1 million donation by NYRR. We are asking you to join us by making a $26.20 donation, or whatever you can afford, to help bring recovery and hope to those communities and families most affected. Proceeds will go to Hurricane Sandy Relief, administered by the Mayor's Fund to Advance New York City. You can also donate to the relief effort through NYRR's fundraising platform, CrowdRise, which includes the American Red Cross and other charities.

NYRR will redeploy the marathon resources and materials toward the recovery effort. We will share the details of this project as they are finalized in the days ahead.

We all recognize this has been a very challenging time in New York City that has impacted so many people, including you, our runners. Please know that this is one of the toughest decisions we have ever made, and that we deeply appreciate your support.

According to one New York Times article, the cancellation will cost the city an "immense" amount of money.

(Image source of the finish line before the marathon was cancelled, showing a fallen crane in the background.)

Discussion Starters:

• What's your view of the email from Road Runners? How well does it explain the decision, and how convincing is the rationale?
• What this the best decision for NYC? Why or why not?

Another Premature News Report: Dow Chemical

For the second time in two weeks, bad news was inadvertently released ahead of schedule. Although Dow Chemical had planned to announce 2,400 employee layoffs and 20 plant closings on Thursday morning with its quarterly earnings statement, the news went out as a draft Tuesday night.

On Dow Chemical's earnings conference call, Doug May, VP of investor relations, explained the mishap in his introduction:

"Good morning, everyone, and welcome. Thank you for joining us on such short notice and being flexible with your schedules. As you know, we issued our earnings press release yesterday evening, October 23. This was earlier than usual due to an inadvertent and premature release of our restructuring announcement. Both the restructuring release and the earnings release went out on Business Wire and were posted on the Internet on dow.com."

In this case, the market reacted favorably to the restructuring. However, for Google, in a similar situation last week, the result wasn't nearly as positive.

Google's intent was to release its disappointing third-quarter results after the closing bell, but the draft statement slipped out on at 12:30 p.m. with the text "PENDING LARRY QUOTE." CEO Larry Page briefly said on the earnings call, "I'm sorry for the scramble earlier today."

Google blamed its finanial printer, RR Donnelly:

"Earlier this morning RR Donnelley, the financial printer, informed us that they had filed our draft 8K earnings statement without authorization. We have ceased trading on NASDAQ while we work to finalize the document. Once it's finalized we will release our earnings, resume trading on NASDAQ and hold our earnings call as normal at 1:30 PM PT."

Google shares lost about 9% before trading was halted.

Discussion Starters:

• Why is it important for companies to coordinate disappointing market news, such as layoffs and quarterly earnings?
• What controls should a company have in place to avoid this type of situation?

RealNetworks Posts Internal Layoff Email to Facebook

Why wait for employees to forward internal messages to the press? RealNetworks founder and interim chief executive Rob Glaser has posted a layoff email to employees on Facebook.

Dear RealNetworks Team,

I'm writing to provide an update on the progress we've made over the past 8 weeks and to provide some context and information regarding the layoffs that are taking place today.

When I came back in as Interim CEO on July 3rd, I said we would focus on 3 things:

Reviewing and assessing all of our businesses and new initiatives,

Coming up with a go-forward Strategy for RealNetworks that would set us up to grow and thrive, and

Putting together a plan to stop burning cash and to return the company to profitability.

I also said we would move fast, have a bias towards action, and would work hard to complete all 3 of these efforts within 2 months.
After a lot of hard work by many people across the company and around the world, today I report to you that we have indeed achieved the 3 objectives we set out to work on beginning 8 weeks ago.

Very soon I will have a lot more to say about our collective assessment of our businesses & new initiatives, and about our go forward strategy. Specifically, we have scheduled a series of company meetings – both in Seattle and at our main offices around the world – for on or around September 6th. After these meetings I believe that each of you in attendance will walk away with a clear understanding of our strategies and excitement regarding where we're going.

Today I will discuss our plans to return the company to profitability -- in a way that will set us up for future growth & success.

As we mentioned on our financial results call on August 8th, our senior team has put together a plan to cut at least $45 Million of annualized costs. This plan has several aspects to it; one of the main ones is to streamline our operations and to do things more efficiently.

Unfortunately, a major part of this streamlining entails reducing our workforce from approximately 1140 people to about 980 people. We are doing this in two phases. The first phase, which begins today, involves laying off approximately 80 people, who are being given notice today.

The second phase, which will take place over the next 3 to 7 months, involves approximately 80 more people, who are being notified today that there is a specific future date when their current assignment will be ending. We hope to redeploy a number of these people when their current assignments end, but as of today don't know how many we will find positions for. These people are working on projects that will merge duplicate systems or otherwise make us more efficient.

I want to express my deepest gratitude to the approximately 160 people affected by today's announcement, and also my remorse that we have had to take these steps. You have all made major contributions to RealNetworks. We are grateful for everything you have done for our company and our customers.

I also want to express my appreciation to the approximately 980 people who are not directly impacted by today's actions, and to acknowledge that many of you are indirectly affected, because of the impact on your colleagues and friends.

Permit me to close on a personal note. When I came back into Real after having been away from day-to-day operations for 2 ½ years, I thought there was a pretty high likelihood that there would be a day like today. I knew it would suck for everyone, and indeed it does.

But I promised myself that if we did have to do a significant layoff, I would do everything in my power to make sure that when we did it we also knew where we were going. I wanted to be able to look everyone in the eye and tell them that we have a plan to succeed that I believed in from the bottom of my heart.

I feel like we are almost there. While we still have a few areas to work out, we have made great progress. I can honestly tell you today that we are at least 80% of the way to having such a plan for every major part of our company, and have line-of-sight on the final 20%.

This clarity on strategy, as you would expect, has significantly influenced how and where we are cutting costs, and where we are investing for the future. I look forward to discussing this further when we meet next week.

Rob

Glaser responded to a New York Times inquiry about his decision by saying that he will limit his Facebook posts to major company-wide messages. The few comments he's received on Facebook support his transparency.

Fortunately, the email also is well written and appropriate for a layoff message. And it's not the first. The New York Times reports that Glaser has been keeping employees informed throughout the process, so this email is no surprise.

Discussion Starters:

• How does Glaser balance emotional appeal and logical arguments in his email?
• How is the email structured? Does this work well for the message and audience?
• What do you think of Glaser's tone, particularly this line: "I knew it would suck for everyone, and indeed it does"?

Where's the Line Between Constructive Criticism and Meanness?

A negative New York Times book review has caused a fiery reaction on Twitter. William Giraldi's review of Inside and Signs and Wonders, two fiction stories by Alix Ohlin, includes these criticisms:

• "Alix Ohlin's sophomore effort yawningly announces itself as 'Inside,' a forgettable moniker that suggests everything and so means nothing."
• "Meet the four principal, cliché-­strangled Canadians whom Ohlin flies around like kites in a waning zephyr..."
• "Ohlin's language betrays an appalling lack of register - language that limps onto the page proudly indifferent to pitch or vigor."
• "William Gass once called this breed of abysmal writing 'the uselessly precise fact' - it's what you doodle when you need to fill a page but have nothing important to say. What then passes for wisdom in this novel? Nonsense clichés..."

Giraldi sums up his review: "Every mind lives or dies by its ideas; every book lives or dies by its language."

Although Giraldi got some support on Twitter, several tweeters found the review too harsh. 

 

Discussion Starters:

• Read the entire book review. What's your opinion of the author's approach and tone?
• Have you ever received feedback that you considered too harsh? What were the circumstances?

Lacoste Responds to False Coupon Code

Apparently, Lacoste had trouble with a fake coupon cope that was circulated online. Here's the CEO's email to one customer. What do you think of the response?

Dear Jason,

On July 12th, we became aware that an incredible LACOSTE discount code
was making the rounds in social media - a discount code that was not
authorized by LACOSTE. The code was deactivated by the company that
manages our website and fulfills our orders since they determined that the
discount code was procured by fraud, and they decided to cancel all
unshipped orders. You may receive an email notification to that effect
today, and we want to make sure you understand why.

Regardless of whether or not the code was authorized, the cancellation
of your order was not what we wanted, and we're very frustrated with the
situation - though not as much as you probably are.

Although we cannot undo the cancelled orders in our partner's system,
LACOSTE has every intention of honoring the single order you placed with
us. As a result, we would like to offer you a new (and fully
authorized!) $50 discount valid on any single order over $50. Below,
you'll see a unique code that's valid at http://shop.lacoste.com/ between
now and August 31st. Note that it can only be used once, so please
safeguard it.

Your unique code is: [omitted]

Thank you for your understanding and patience, and we apologize for any
inconvenience this has caused you. If you have any further questions or
concerns, please contact me directly at steve@lacoste-usa.com.

Best regards,

Steve Birkhold, President and CEO
LACOSTE USA

Discussion Starters:

• What principles of communicating bad news does Steve Birkhold use in his email?
• What is your assessment of the email? If you were the customer who received this, how would you feel?

AMD Reports Weak Revenue

As companies report their second-quarter earnings this week, chip maker Advanced Micro Devices (AMD) communicated its bad news: revenue is expected to drop by 11%. AMD's news release focuses on disappointing sales in China and Europe.

However, a writer for The Street criticizes AMD's analysis: "AMD blames its upcoming drop in revenue on just about everything out there, except its competition, Intel." While Dell and HP use AMD chips, Apple products switched to Intel a few years ago. AMD's news release is below:

"AMD (NYSE:AMD) today announced that revenue for the second quarter ended June 30, 2012 is expected to decrease approximately 11 percent sequentially.  The company previously forecasted second quarter 2012 revenue to increase 3 percent, plus or minus 3 percent sequentially.  The lower preliminary revenue results are primarily due to business conditions that materialized late in the second quarter, specifically softer-than-expected channel sales in China and Europe as well as a weaker consumer buying environment impacting the company's Original Equipment Manufacturer (OEM) business.

"The company expects second quarter gross margin to be approximately in line with prior guidance. Operating expenses for the second quarter are expected to improve and to be approximately 8 percent less than prior guidance of approximately $605 million, a result of tightly controlled expenses in the quarter.

"AMD will report second quarter 2012 results after market close on Thursday, July 19, 2012.  AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) that day to discuss second quarter financial results and to provide information regarding expected third quarter results.  AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page at http://www.amd.com.  The webcast will be available for 10 days after the conference call."

Discussion Starters:

• Find two or three other sources that explain why AMD's earnings report is disappointing. What's your view of the reasons for declining revenue?
• If you agree with The Street's assessment, should AMD have been more forthcoming? What are the arguments for and against a more straightforward discussion of the Apple and Intel relationship?

Best Buy CEO Resigns

In the midst of an internal investigation about "personal conduct," Best Buy CEO Brian Dunn has resigned. The news was unexpected, although Best Buy has experienced declining sales, attributed to the access people now have to visit stores, compare prices, and then buy elsewhere. Two weeks ago, Dunn announced plans to close 50 stores and cut 400 staff.

A 28-year employee of Best Buy, Dunn was selected as CEO in 2009. Some said Dunn was a poor choice given the company's challenges: he has sales experience but lacks the knowledge and expertise to fix the deeper problems.

The conduct issue remains a mystery, and because Dunn resigned in the middle of it, we may never know the outcome.

In a news release about new leadership, Best Buy assured the public that the decision wasn't business-related:

"The board of directors of Best Buy Co., Inc. (NYSE:BBY) today announced that Brian Dunn has resigned as chief executive officer and director. There were no disagreements between Mr. Dunn and the company on any matter relating to operations, financial controls, policies or procedures. There was mutual agreement that it was time for new leadership to address the challenges that face the company."

At the same time, the company did acknowledge the investigation in a statement to the press:

"Certain issues were brought to the board's attention regarding Dunn's personal conduct, unrelated to the company's operations or financial controls, and an audit committee investigation was initiated. Prior to the completion of the investigation, Mr. Dunn chose to resign."

Focusing on business continuity, Best Buy's news release named an interim CEO:

"Director G. Mike Mikan has been named interim CEO to lead the company while a search for a new CEO is underway. Richard Schulze, the founder of Best Buy, continues to serve as chairman."

Read an update about the potential misconduct issue.

Discussion Starters:

• Analyze Best Buy's news release as a bad-news message. What principles does the release follow, and what principles does it not use? What is the rationale for these decisions?
• Evaluate the quotes in the news release by Dunn and Mikan. Do you find these reassuring?

New Yahoo CEO's Layoff Email

When Scott Thompson took the job as Yahoo's chief executive in January, he likely knew he had difficult work ahead of him. To compete for shrinking advertising revenue against Google and Facebook, Thompson has announced a refocus on Yahoo's core media and communications, platforms, and data.

With this new focus, Yahoo will lay off about 2,000 employees, roughly 14% of the company. Thompson's email to employees explains the decision and then gives the bad news:

 

Business communication students may find it interesting to compare Thompson's memo with  Yahoo layoff memos from the two previous CEOs:

• Jerry Yang, Yahoo's founder and CEO from January 1994 to January 2009: October 2008 and December 2008 memos

• Carol Bartz, CEO from January 2009 to September 2011: December 2010 memo

Discussion Starters:

• Thompson's email mentions "dignity and respect" twice. Does this represent a clever strategy, strong reinforcement, sloppy editing, or something else? How do you think employees might react to this phrase?
• Compare the CEOs' emails. Consider audience focus, tone, organization, writing style, and editing.
• Considering the different circumstances around each layoff, which memo do you think is most effective and why? 
• If you were consulting with a CEO prior to announcing layoffs, what principles would you advise that he or she use in writing an email to employees?