Jan 24, 2011

Blogging about bad news on the corporate blog

A principle factor of open and transparent organizations is open and transparent communication. The aspect is easy to think about when the news is good. But what do blogging CEOs do when they have to make tough decisions, like layoffs?

Do they stick to the open system? And if yes, do they regret it?

Personally, I think the way to open and transparent organizations 2.0 is a one-way street. Once you have committed to it, you cannot go back.

But what are the business benefits or risks?

Here's an interesting article on the PR Daily.

Amplify’d from www.prdaily.com

The first rule of holes: When you find yourself in one, stop digging.

That’s good advice for a number of life situations, but how does it apply to firms who have been forced to downsize because of the weakened economy? Is it better to say nothing or to broadcast the potential for job cuts and risk making a bad situation worse?

In the social media age, many companies are opting to communicate despite the risk, using blogs to get out the news about layoffs and weaken any potential PR blows by maintaining control of the story.

Zappos.com is one example. The online clothing and shoe retailer recently cut its work force by 8 percent, a move that CEO Tony Hsieh announced in an e-mail to employees that was followed by a blog post.

“This is one of the hardest decisions we've had to make over the past 9.5 years, but we believe that it is the right decision for the long-term health of the company,” Hsieh wrote in his Nov. 8 blog post. The posting said that Zappos would pay all of its laid off employees for at least the next two months and reimburse them for any COBRA-related health-care costs.

Hsieh told Ragan.com that the blog post is consistent with the company’s focus on “open and honest communication” as a core value.

For us, transparency is just part of our culture,” Hsieh said. “While it's hard to translate into specific numbers, our belief is that our culture and our brand are two sides of the same coin. The brand may lag the culture, but eventually it will catch up. Our belief is that if we get the culture right, most of the other stuff (like great customer service), will happen naturally on its own.”

Steven Carpenter, CEO of Cake Financial, said a culture of transparency was a factor in his decision to blog about the company’s Oct. 20 layoffs.

“Blogging is all about making the company transparent and opening up a direct communications with all of our constituents: employees, customers and partners. Cake's mission is to bring transparency to the investment world, which is traditionally not very open, and therefore we run the company in the same manner,” he says.

Loic Le Meur, CEO of online blogging site Seemic.com, blogged about layoffs when he let a third of his work force go on Oct. 10. He told The New York Times last week that the blog entry was done to head off the possibility of bad PR.

But in a Nov. 10 post on his blog, Le Meur said that while the decision to be transparent about the layoffs was difficult, was the right move.

“Looking toward the future and not the past is the most important, being transparent and talking about bad news helps digest them and keep going,” Le Meur’s blog post says. “Going through positive and negative cycles is just the normal life of a company.”

Other firms that have blogged about recent layoffs include Tesla Motors and real estate valuation firm Zillow.com.

The practice has earned kudos in some quarters of the Internet. An example is the response to a post by Jason Calacanis, the CEO of search-engine and media site Mahalo, about the company’s decision to pare its work force by 10 percent.

Read more at www.prdaily.com