Almost every big PR embarrassment for corporations results from a disconnect between executive functions and, well, PR. What this means is, when an embattled organization plans, announces, or takes major steps that customers and clients will certainly notice, corporations disregard how such actions will be perceived by other key stakeholders. That unfavorable outcome is usually a failure of proper PR execution.
And, what often blasts such situations from bad to worse is when a CEO decides to throw politics into the mix. To illustrate, take a gander at recent comments from Darden Restaurants, the parent company of Red Lobster and Olive Garden. In October Darden publicly raised concerns that impending Obamacare requirements would force it to convert restaurant staff to part-time to avoid regulatory costs.
Fast-forward a few weeks later when Darden issued its latest earnings press release, with the CEO warning that Q2 2013 earnings would fall short of expectations and blaming “recent negative media coverage that focused on Darden within the full-service segment and how we might accommodate health care reform.”
Darden may have been better off issuing a different press release blaming the dog for eating its earnings.
Here’s the reality: most investors agree that Darden’s “negative media coverage” was likely caused by poor employee and customer satisfaction surveys, which … wait for it … were based on negative reviews of part-time staff, who … wait for it … were brought in by Darden as part of its new approach toward Obamacare costs.
So what we learn from the PR perspective is when handling investor relations communications, companies must properly blame the root causes of poor earnings instead of pulling them out of fried ocean goodness air. Without seeing things through this way, that same “negative media” will boomerang back in the form of negative analyst comments.
And while we’re at it, it’s worth asking whether Darden would similarly attribute any increased earnings to positive media attention? Just sayin’…