Monday, December 28, 2009
On the wall of the art studio at my high school was a quote from Pablo Picasso: "Art is the lie that tells the truth."
In fashion photography, it seems to have become the lie that tells a lie.
With the after-Christmas sales well under way, I've been thinking about restocking my closet a bit, which has had me paying more attention to catalogues and magazines.
Photographs have been manipulated since the technology was first invented, and fashion photographs have always traded in an induced sense of inadequacy -- or why hire preternaturally beautiful people to wear the clothes? True, it's been years since I was young enough, and foolish enough, to think, "If I wear that dress / sweater / coat / pair of pants / whatever, I'll look as good as she does." But every year, it seems, the standards of "pretty enough" -- and especially, "thin enough" -- get higher and more unobtainable.
The image above -- of former Ralph Lauren model Filippa Hamilton -- has been widely shared on the Internet, at sites like BoingBoing.net and Jezebel.com (where it was included in the site's 2009 "Photoshop of Horrors Hall of Shame"). Comments poured in, both about the absurdity of the image itself (how many women, even extraordinarily thin ones, have a head larger than their pelvis?), and about the decision by Ralph Lauren to terminate Hamilton's contract because, at 5'9" and 120 lbs., she is too fat.
With rates of eating disorders rising in the industrialized world (and now affecting young men as well as young women), there have been calls for legislative restrictions. In late September, for example, the UK's Telegraph reported on calls in France to require digitally-enhanced photographs to carry clear warnings that changes have been made to the image.
In a brief article, New York magazine reported on proposed French and British legislation, and noted that the "U.K.'s Committee of Advertising Practice, which is responsible for the country's code of advertising, just received a report authored by more than 40 academics recommending a ban on Photoshopped ads targeted at girls younger than 16."
Friday, December 11, 2009
A friend of mine brought my attention to this post at Business Insider. Basically, health insurance companies are using Facebook virtual currency to get game players to email Congress about their supposed opposition to the health-care reform bill.
As article author Nicholas Carlson points out, the companies are exploiting Facebook gamers' desire to obtain more virtual currency (to help them move up the ranks in games like Farmville), by offering currency in exchange for "trying" a new product or service.
But in this case, "Instead of asking the gamers to try a [specific] product..., "Get Health Reform Right" requires gamers to take a survey, which, upon completion, automatically sends the following email to their Congressional Rep: 'I am concerned a new government plan could cause me to lose the employer coverage I have today. More government bureaucracy will only create more problems, not solve the ones we have.'"
"Astroturfing" like this (i.e. fake grass-roots movements) isn't new, and it's not illegal. But it is completely unethical.
This particular instance is the product of an innocuous-sounding (ain't it always the way?!) organization: "Get Health Reform Right", which describes itself as a "project of organizations whose shared mission is to ensure consumers continue to have access to employer-sponsored healthcare plans." (Full disclosure here: My personal definition of "Getting Health Reform Right" would be 100% single-payer.)
Who is/are "Get Health Reform Right"? Carlson did a little research, and came up with the following organizations:
- Association of Health Insurance Advisors
- America’s Health Insurance Plans
- American Benefits Council
- BlueCross BlueShield Association
- Council of Insurance Agents & Brokers
- Healthcare Leadership Council
- Independent Insurance Agents & Brokers
- National Association of Health Underwriters
- National Association of Insurance and Financial Advisors
- National Retail Association
My own skeptical inclination is to think that if the established health-care players are so concerned by even the not-even-close-to-what-I-would-have-hoped-for legislation working its way through Congress, it must be pretty damn good.
Or they wouldn't have to lie like this to get their messages sent.
Monday, December 7, 2009
Instead, I'd like to think about this quote, which I found in Matt Richtel's article in today's New York Times on "Promoting the Car Phone, Despite Risks":
"If you’re an engineer, you don’t want to outlaw the great technology you’ve been working on... If you’re a marketing person, you don’t want to outlaw the thing you’ve been trying to sell. If you’re a C.E.O., you don’t want to outlaw the thing that’s been making a lot of money."
Richtel identifies the speaker as Bob Lucky, a now-retired former director at Bell Labs.
It's a great insight into a key problem in corporate ethics: When you have a great new product, how carefully do you want to look at its potential problems?
Lucky and other early developers were aware of the potential for "distracted driving". A former Motorola engineer admits that "I’d pass by the exit I was supposed to take because I was talking on the phone."
"Thinking back, he said he was 'absolutely' aware of potential dangers but did not think roads would become filled with distracted drivers."
One distracted driver, of course, is all it really takes, especially at high speeds and on a congested roadway.
The tough question is how to encourage corporations to build in a "devil's advocate" position into their operations: someone whose job it is to think about potential negative ramifications of a new product or technology and not just its upside marketing potential. Where such a role is played, it's usually taken on by legal (which is why we have all those great little warnings on not misusing the products we buy).
In this case, I'd like to see one cellphone manufacturer or service provider take the high road and stake out a safety zone -- be the Volvo of cellphones if you like -- perhaps by engineering a phone that won't work if it passes through x number of cell transmitters in y minutes (although this would prevent passengers from using their phones too).
Thursday, December 3, 2009
Or more precisely, about NBC "News".
Michaele Salahi apparently harbors aspirations of "starring" on the Bravo cable channel's reality show, Real Housewives of D.C., and while she and her husband were entering the White House, they were followed by a Bravo camera crew.
Monday morning, the Today show, which, while generally fluffy infotainment, is a part of the news division, had the Salahis as guests. At no point in the interview -- or in the next day's followup -- did Matt Lauer mention that Bravo and NBC are corporate siblings, both part of NBC Universal. In fact, both are based in New York's Rockefeller Center.
As reported by Brian Stelter in today's New York Times, "Both NBC and the couple say that they received no money for appearing on the 'Today Show.' An NBC staff member suggested Wednesday that the couple selected Mr. Lauer in a good-will gesture to NBC and, by extension, Bravo."
According to Stelter, NBC's Nightly News, when reporting on the issue Tuesday, "did note the corporate connection".
Did the corporate connection affect the questions that Mr. Lauer posed? Probably not. But wouldn't you feel more confident about it if you had known the connection ahead of time rather than after the fact?
Wednesday, December 2, 2009
Now, reports Business Week, more than 1700 students and recent graduates have signed, not just from Harvard, but also from Northwestern's Kellogg School of Management, Yale School of Management, Foster School of Business (at U. of Washington), Fuqua School of Business at Duke, and many others.
The oath begins, "As a manager, my purpose is to serve the greater good by bringing people and resources together to create value that no single individual can create alone." (click here for the oath's website)
The Harvard ethics oath is not the first (both INSEAD and Thunderbird claim that honor), but it appears to be the first to have gone viral in a fairly impressive way.
While the oath is "just words", its intent is greater than that. As an earlier Business Week article pointed out, "the oath's creators have big plans for the future of the project. In addition to eventually having hundreds of thousands of MBAs sign the pledge, they want it to be part of a much more ambitious agenda to professionalize the occupation of management, transforming it into a vocation much like medicine or law."
Both medicine and law require more than oaths; they require licensure, and that license carries teeth. A doctor can lose her license to practice, and a lawyer can be disbarred. Will managers willingly put themselves under such rigorous oversight?
Friday, November 20, 2009
For weeks now, Main Streeters have been complaining about the huge bonuses Goldman Sachs is preparing to pay its top employees. For example, the Financial Times's Kevin Sieff reported on Monday about demonstrators from SEIU (Service Employees International Union) protesting outside Goldman's Washington offices. And I have written with considerable skepticism about Goldman CEO Lloyd Blankfein's claim to be doing "God's work" (which, to be fair, he came close to recanting Monday; as reported by Graham Bowley in the New York Times on Wednesday, Blankfein said, "We participated in things that were clearly wrong and have reason to regret. We apologize.")
Goldman received a $10 billion bailout from the taxpayer-funded Troubled Asset Relief Program in October 2008, but has already repaid that. As far back as June of this year, the firm reported that it had already earmarked more than $11 billion for employee bonuses.
As a result, most Wall Streeters have ignored the complaints from the little people. After all, making money, and lots of it, is what Wall Street is all about, isn't it?
Today's Wall Street Journal reports, in an article by Susanne Craig, that Goldman shareholders are starting to complain, too. As Craig notes, "Despite record net income and compensation at Goldman as markets rebound and the firm outmuscles weakened rivals for business, analysts expect its 2009 earnings per share to be 22% lower than in 2007 and roughly equal to 2006 earning." (italics mine)
Reducing the bonus pool could substantially boost per-share earning and the share price. Shares traded yesterday at more than $170, up nicely for the year, but still well below the $250 per share peak in 2007. Last time I checked, corporations were supposed to maximize shareholder value (or stakeholder value -- but that's a rant for another day). Considering that Goldman employees own between 10 and 15% of the company's stock, they might even appreciate the move. Or not.
Goldman's employees are on course to earn about $717,00 on average in 2009. This is far beyond Wall Street's previous high-water mark, set by Goldman in 2007, of $661,490 per employee (The per-employee figure, of course, a ruse in itself; the Goldman administrative assistants and janitors earn, um, somewhat less; as the Times noted back in July, three years ago, Goldman paid more than 50 employees more than $20 million each. Moreover, Goldman artificially reduced the bonus number by including temporary employees and consultants in its "employee count".).
I find it hard to believe that even the gifted Mr. Blankfein really warrants a one-year paycheck of this size, but that's just me.
The much more serious complaint is that Goldman is still using taxpayer money, so why is the taxpayer getting cut out of the Goldman payday? After all, Goldman has been borrowing Treasury (our) money at essentially 0%. Where does Treasury get the money? By borrowing it, at Treasury bond rates. Don't you wish your bank would let you do the same thing? Goldman has made great returns on its investments, but it wasn't playing with its own money, it was playing with ours, and I want some of mine back now, thank you.
Wednesday, November 18, 2009
As reported by Steven Greenhouse in today's New York Times, pressure on Russell picked up dramatically last January when the company closed one of its Honduran factories, Jerzees de Honduras, shortly after the 1200 workers there had voted to unionize.
The company agreed Tuesday (1) to open a new factory, Jerzees Nuevo Dia (New Day), which will hire the laid-off workers, (2) to recognize the workers' union and proceed with good-faith collective bargaining, (3) to place laid-off workers who cannot be placed at the new factory at other Russell facilities in Honduras, and (4) to pursue a policy of non-interference in regards to unionization efforts at all Honduran Russell and Fruit of the Loom facilities (click here to read the Russell public announcement).
The student lobbying effort was led by United Students Against Sweatshops (USAS), which over the course of a year orchestrated a nationwide campaign, convincing the administrations of universities from Boston College to the University of Michigan to suspend their licensing agreements with Russell. According to the Times, some of those agreements yielded more than $1 million in sales.
In addition, "student activists picked the NBA finals in Orlando and Los Angeles ... to protest the league's licensing agreement with Russell. They distributed fliers inside Sports Authority sporting goods stores and sent Twitter messages to customers of Dick's Sporting Goods to urge them to boycott Russell products."
USAS has been resisting Russell for years, slowly building the coalition that persuaded universities to adopt codes of conduct for licensees' factories that could then be used to convince those same universities to suspend Russell's licenses when the coalition produced evidence of worker harassment and intimidation.
USAS also persuaded more than sixty US members of Congress to sign a letter to Russell, expressing "grave concern" about the reports of violations of worker rights, and noting that if the reports were true, "the factory has violated internationally recognized labor standards, Russell's own code of conduct, and Honduran law...."
Ever wonder what just one person can do? Here's your answer: Organize.
Monday, November 16, 2009
Duff Wilson, in today's New York Times, reports that major drug companies are aggressively raising prices in advance of health-care legislation (complete article, here). This sounds suspiciously like the ploy of credit-card companies, raising interest rates in advance of the approved-but-not-yet-in-force Credit CARD legislation (click here for an earlier blog post on that subject).
Note that the drug companies' moves are coming, as Wilson reports, at the same time that they have promised "to support Washington’s health care overhaul by shaving $8 billion a year off the nation’s drug costs after the legislation takes effect".
When is a sale not a sale? When the seller hikes prices beforehand to create an artificial "discount" price.
Moreover, these increases come at a time when, thanks to the deep recession, overall consumer prices have been falling: according to the Bureau of Labor Statistics, prices have fallen 1.3% over the last 12 months.
Prescription drug prices, in contrast, are up about nine percent.
But perhaps I'm being unfair to suggest that the pharmaceutical companies have learned from the credit-card companies. After all, Wilson notes that the same thing happened three years ago, just before the Medicare drug coverage program went into effect (click here for Times article from 2006). At that time, according to AARP (the American Association of Retired Persons), which conducted the pricing research, "prices charged by drug makers for brand-name pharmaceuticals jumped 3.9 percent, four times the general inflation rate during the first three months of this year and the largest quarterly price increase in six years."
So maybe it's the credit-card companies who learned from pharma. Either way, we need to send them the "don't be evil" memo.
Monday, November 9, 2009
You may have read last week's reports from London (one example, Julia Werdigier's piece for the New York Times is here) of bankers like Barclay's John Varley defending the purity of their motives ("Profit is not satanic," was my favorite among the quotes from his speech at the church of St. Martin in the Field. Meanwhile, over at St. Paul's Cathedral, you have Brian Griffiths, an advisor to Goldman Sachs, saying, "We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all.").
If you thought you heard an unrefined "Oh, yeah?" from me, you were right.
Compare the bankers' comments to these from Rowan Williams, the Archbishop of Canterbury: "There hasn't been a feeling of closure about what happened last year. There hasn't been what I would, as a Christian, call repentance. We haven't heard people saying 'well actually, no, we got it wrong and the whole fundamental principle on which we worked was unreal, empty'."
He added, "I feel that .... what I call the 'lack of closure' [is] coming home to roost. It's a failure to name what was wrong. To name that, what I called last year 'idolatry', that projecting of reality and substance onto things that don't have them."(click here for the complete article from the Times of London)
In today's Salon, Andrew Leonard pointed out an excellent (but long) article by John Arlidge in yesterday's Times of London, in which Goldman Sachs chairman and CEO Lloyd Blankfein claims to be doing, yes, "God's work."
My "Oh, yeah?" just got louder and more cranky.
Blankfein is aware that "people are pissed off, mad, and bent out of shape" at what bankers have wrought.
He just thinks that we're wrong to be so angry: "If the financial system goes down, our business is going down and, trust me, yours and everyone else's is going down, too."
Doesn't that sound like a threat? Doesn't it sound as though he's saying, 'Let me do whatever I want, unless you want me to wreck it all.'
Yeah, that's what I thought, too.
Thursday, November 5, 2009
In its press release, Kellogg's called the addition of antioxidants to the Rice Krispies (and Cocoa Krispies) formula "one way the Company responded to parents indicating their desire for more positive nutrition in kids' cereal."
"While science shows that these antioxidants help support the immune system, given the public attention on H1N1, the Company decided to make this change," the release continued.
According to Bruce Horovitz's article in USA Today, San Francisco's city attorney last week asked Kellogg's to prove its claim.
Many nutritionists were appalled by the claim; my favorite comment (quoted by USA Today) came from Kelly Brownell, director of Yale University's Rudd Center for Food Policy and Obesity: "By their logic, you can spray vitamins on a pile of leaves, and it will boost immunity."
Writing in her blog, Marion Nestle, Paulette Goddard Professor of Nutrition, Food Studies, and Public Health at New York University, said, "In the absence of FDA action, food marketing is allowed to run rampant, and city and state attorneys are doing the FDA’s job."
This isn't the first time I've written about wacky claims for breakfast cereals (click here for comments on the "Smart Choices" program). But these claims aren't just wrong (although they are); they're stupid, too.
Rice Krispies is one of the best-known cereal brands in America. When you've spent years building a brand, why on earth would you risk it by tacking on a claim that, as Dr. Brownell said, "belongs in the hall of fame" (and, obviously, not in a good way).
Many years ago, the late great advertising genius David Ogilvy told his "Mad Men", "The consumer is not an idiot. The consumer is your wife."
Fool me once...
Tuesday, November 3, 2009
But it might not be enough.
As reported in Ron Lieber's article in today's New York Times, the annual revenues for monthly credit-monitoring services range from $650 million to $700 million. Experian is by far the biggest player in the sector. When an annual report is free, why are so many people -- upwards of nine million -- paying for monthly reports?
Could it be that these consumers are confused about what they're getting, and what they're paying for? Heaven forbid. If you've seen the many ads for freecreditreport.com, you too might think that what is being sold is a free credit report.
(I considered embedding one of the ads for freecreditreport.com, which Experian owns, here, but the jingle is one of the worst earworms out there. The FTC is now sufficiently annoyed about the freecreditreport situation that it has created and run its own parody ads, which are actually quite funny; I've posted one, below.)
Experian, of course, denies that it is doing anything dishonest. Lieber quotes the president of the firm's Consumer Direct division: "You get a free credit report and free score for test-driving our product... We've always felt that it's been very upfront and a fair opportunity for the consumer to become more aware and comfortable with the credit reporting concept."
That first report is free, but if you do not cancel immediately, you get hit with a monthly fee of $14.95. It appears that the amount is small enough that many consumers let such a relatively small amount slide, often for months, before they get around to canceling (canceling the service is not a completely stress-free experience, either; for example, while you can sign up for the service online, you can only cancel it by phone).
Remember that a genuinely free -- but annual, not monthly -- credit report is available from annualcreditreport.com, which is the only authorized (by the government) source for a free annual report. Obtaining a genuinely free report will still route you through the major suppliers (Experian, TransUnion, and Equifax) who will of course try to upsell you to a monitoring program before they provide the single free report (For more information, go to freecreditreport.gov -- which will redirect to an FTC site, ftc.gov/freereports).
Congress has since 2003 required the three major credit bureaus to provide one free credit report to every American each year. The similarity between the URLs has been confusing consumers since day one, to the point that, according to Lieber, "the FTC [at one point] asked Experian to give it the freecreditreport.com URL to end the confusion, but the company declined.")
I would feel a lot less suspicious of Experian's motives if they had given up that URL, wouldn't you?
Tuesday, October 27, 2009
The senator said, "..[No] sooner had it [the Credit CARD Act of 2009] been signed into law, but credit card companies were looking for ways to get around the protections this Congress and the American people demanded."
Meanwhile, over at the Financial Service Roundtable, as reported today by Andrew Martin in the New York Times, banking companies continue to assure us that they're not raising fees because of the new legislation, but "because of risks posed by the unsteady economy and by card holders themselves, who are defaulting on their payments or paying late more often."
Good idea, that, blaming the banks' customers, don't you think?
Monday, October 26, 2009
Today's CNNMoney.com carries a nice roundup of the problems facing credit-card consumers, under the title "5 evil things credit card companies can (still) do". The top five:
- Rate hikes (APRs now run as high as 36%, according to the Center for Responsible Lending (CRL) which sounds more like loan-sharking than banking to me);
- New fees (since current legislation addresses only existing fees and practices);
- Higher minimum monthly payments (in some cases, a sudden jump from 2% of the monthly balance to 5%);
- Fewer rewards (some cash-back cards have gone from 2-3% to 1%); and
- Slashed credit limits and canceled accounts (without so much as a call from the bank).
The act was intended to ban unfair rate increases, prevent unfair fee traps, require plain sight / plain language disclosure of terms, provide a new level of accountability, and offer special protections for students and young people. (Click here for the White House press release at the time of the bill's signing) Sounds great, doesn't it?
But banks are taking advantage of this interim period to, for example, raise rates while they still can.
What's a consumer to do? Well, the easy answer is to stop using credit cards entirely (or at least to pay off the total amount owed every month).
Unfortunately, that's not an option for everyone (CRL research shows that a majority of low- and middle-income families depend on credit cards to pay for basic living expenses).
At least you can shop around for cards, and not to remain wedded to one simply because "I've had it for years." That takes time, of course -- something else a lot of us don't have -- but is better than nothing. Note, however, that abruptly canceling a card can negatively affect your credit score....
Banks, of course, will argue that these additional fees are necessary to protect themselves from fraud and non-payment (but -- who started handing out cards to every person with a pulse, not to mention the occasional family dog?). They have responsibilities to shareholders, they note.
But while these moves may add to the banks' bottom lines, the real bottom line is that they only increase the resentment that consumers feel towards the banks. If they think that the only thing that matters is this quarter's returns, then nothing I say or that we as consumers do will make a difference.
But if they believe that the long run matters, then they themselves should be pushing for greater transparency and accountability throughout the industry. Smart banks will get out in front of this parade.
Friday, October 23, 2009
Earlier this week, the billionaire head of the Galleon Group, a hedge fund, was arrested and charged with conspiracy and securities fraud, having profited, as the New York Times put it, "not from his trading genius but from his Rolodex" (click here for the initial story, here and here for selected follow-up pieces).
Information is life-blood of smart investing, and most of it is of course obtained legally. But inside information is, by definition, non-public and material to an investor -- whether or not the information ends up making that investor money (although, of course, it usually does, or it wouldn't be "material").
The problem is that the line between aggressive research and insider trading is often a fine one. In a Times DealBook blog, Leslie R. Caldwell, the co-chief of the white-collar crime division at the law firm Morgan, Lewis & Bockius, says that insider trading can be difficult to prove: "The line between buying legitimate research, trading rumors and gossip, and illegally paying for market-moving information can be complicated." (Click here for the complete DealBook post)
So ... we should just throw up our hands and walk away? No.
But this case got me thinking about fine lines and ethical decision-making. Ethical problems are at their thorniest when the choices are less than clear: not between an obvious good and an obvious evil, but between two apparent goods, or two apparent evils. How can we determine the "righter" thing to do?
There are two key questions to ask: one "pre" and one "post".
The "post" question is, What will be the consequences of my choices? You can never be sure of all the possible consequences of a decision (that's why we have that phrase, "unintended consequences"!), but it's worth taking the time to explore as many potential ramifications as possible: the probable and the improbable, the preferable and the less preferable.
Unless, of course, you are a Kantian, and live by "categorical imperatives" -- if one of your categorical imperatives, for example, is "Always tell the truth", then the potential consequences of telling the truth in any particular situation aren't relevant. The proper course of action is to tell the truth.
For the categorical types, the "pre" question is more important: What's my motivation for making this choice? There's no honor in doing the right thing if doing the right thing is what you want to do anyway; there's only honor in it if your inclination is not to do it, but your sense of duty or honor or will compels you.
The problem with both of these approaches, while important, is that we humans are so good at rationalizing: we concentrate on those consequences that are preferable (whether or not they are probable), and we concentrate on those motivations that show us off in the best light.
But that still doesn't mean that you have a free pass to do whatever you like....
Wednesday, October 21, 2009
According to the Smart Choices program website, to qualify for the "Smart Choice" checkmark, "a product must meet a comprehensive set of nutrition criteria based on the Dietary Guidelines for Americans and other sources of nutrition science and authoritative dietary guidance."
The Smart Choices nutrition labeling campaign was "created by a diverse group of scientists, academicians, health and research organizations, food and beverage manufacturers and retailers. The group worked collaboratively to develop the program's foundation, goals and criteria" and was launched with some fanfare earlier this summer.
Different criteria were established for the 19 different product groups (beverages, soups, dairy products, snacks, etc.). Sounds good doesn't it? Just what consumers need in the grocery aisles: a helping hand to steer them toward "smart" buying and eating habits.
But back in early September, the New York Times reported that high-sugar-content cereals like Froot Loops (41% sugar, by volume) had earned the "Smart Choice" check. How could Froot Loops be a "smart" choice, you ask? Well, according to the nutritionist who heads the program board, it's because it's a smarter choice than doughnuts. Moreover, asserted a Kellogg's senior nutrition executive, "Froot Loops is an excellent source of many essential vitamins and minerals and it is also a good source of fiber..." (Click here for the earlier story.)
Today, William Neuman reported in the Times that the Food and Drug Administration would, early next year, "issue proposed standards that companies must follow in creating nutrition labels that go on the front of food packaging.... [which] could force manufacturers to deliver the bad news with the good, putting an end to a common practice in which manufacturers boast on package fronts about some components, such as vitamins or fiber, while ignoring less appealing ingredients, like added sugar or unhealthy fats."
Dr. Margaret Hamburg, the FDA commissioner, is quoted as "repeatedly" mentioning a British package labeling program "that uses red, yellow or green dots -- like traffic signals -- to indicate the relative amounts of important ingredients" (like saturated fat, salt, or added sugar). This, she said, "could provide a model for the FDA."
What I found particularly interesting, and particularly depressing, about this unfolding story is that Smart Choices itself lists the following principles for developing its goals and criteria: Transparency, Coalition-based, Comprehensive, Applied Voluntarily, and Flexible.
What on earth is "transparent" about presenting a sugary breakfast cereal as a "smart choice"?
Sunday, October 18, 2009
For consumers, it's a way to wear their values on their sleeves (perhaps even with a t-shirt!); not surprisingly, most of us like the idea of spending our money with companies that do good. For corporations, it's a way to present a more human face, and to move product, often at a higher profit margin, as reported in Kris Frieswick's article in the Boston Globe Sunday magazine early this month.
There is nothing ethically wrong with higher profit margins per se. There is, however, something ethically wrong with misleading your customers.
I suspect that most consumers buying pink-ribbon-bedecked products this month assume that some portion of the purchase price will be contributed to the Susan G. Komen Foundation for breast cancer research.
Sadly, this is not always the case.
As reported by Kerry Gold at The Atlantic online, and by Aimee Picchi at Daily Finance, a pink package may mean very little. Picchi reports (and Gold quotes) that a "pink Swiffer sweeper, made by consumer-products giant Procter & Gamble, ...sports a pink ribbon accompanied by the phrase 'early detection saves lives.' So how does purchasing a pink Swiffer help the cause? It's unclear from the label, because it contains no information about how its purchase will help breast-cancer causes. And, according to a Procter & Gamble spokeswoman, the company will only make a two-cent donation to the National Breast Cancer Foundation if a consumer uses a coupon from Procter & Gamble's brand saver coupon book, which was distributed in newspapers on Sept. 27. Without the coupon, the limited-edition pink packaging on the Swiffer is simply designed to draw awareness to the cause."
Having now read the fine print, do you get that warm fuzzy feeling? How do you feel about buying pink Swiffer products? How do you feel about P&G?
Such deceptive practices will eventually be revealed for what they are, and could have a hugely negative effect on brand perceptions.
But beyond the fine-print problem that can be found throughout cause-related marketing (I'm not singling out the pink-ribbon folks because they're particularly wrong-minded about this; I'm singling them out because we are awash in pink this month), there are problems that are specific to breast-cancer related marketing.
The Susan G. Komen Foundation has trademarked a pink ribbon symbol; in order to carry the official pink ribbon, a corporate partner must agree to adhere to the Better Business Bureau's Standards for Charity Accountability, among other requirements. A minimum contribution of 10 percent of the product or service is the "recommended donation." If partners cap their donations -- at, say, $500,000 in one year -- they are supposed to inform consumers that the cap has been reached. But research by Frieswick and others shows that Komen doesn't track partner behavior as closely as it should.
Moreover, there are any number of other breast-cancer foundations out there, and any number of other generic pink ribbons. Is anyone watching what they do? How much they give (or don't)?
Breast Cancer Action, an advocacy group, recommends that shoppers "think before you pink": Ask questions like, "How much money from this purchase actually goes to breast cancer research?" and "What is the company doing to assure that actually contributing to the breast cancer epidemic?" (BCA refers to these companies as "pinkwashers")
Moreover, as the number of pink products grows every year (pink packages for chicken sausages?!? pink mobile printers?!?), the connection between cause and supporter becomes more tenuous. I expect two results: first, increasing consumer cause-fatigue, and then, falling profits.
If you think breast-cancer research is a worthy cause, write a check yourself. Don't count on the corporations.
Wednesday, October 14, 2009
A few days ago, I wrote about new FTC rules that will require "full-disclosure blogging", which I think is an excellent idea, and about time, too. Essentially, effective 1 December, bloggers who receive freebies from manufacturers will have to disclose that relationship.
The backlash from many bloggers was swift. As Jennifer Vilaga reported for Fast Company, "the takeaway has been this: Bloggers Must Disclose Every Single Freebie Sent to Them From Companies -- Or Pay an $11,000 Fine. Scary." (Italics are Vilaga's; full article is here.)
Vilaga went on to note, "Pundits quickly bashed the FTC as an old-economy regulator trying to legislate new-media technology. Few considered that the government may actually try to protect consumers from false advertising or bloggers on the take."
She quotes one blogger, Amy Sherman, who writes the food blog, Cooking with Amy: "I'm more concerned that this will cause confusion among people and whether they can think they are free to say what they want. How is a blog different from word of mouth?"
If I tell a neighbor that I love my fill-in-the-blank-brand gas range -- and I do -- that's word of mouth. I did the research, and I paid for the range myself. I did not receive it free of charge from fill-in-the-blank-brand-company in exchange for a nice write-up. And my neighbor know that. When you (or any other blogger) write about various products, it's only fair that you be just as transparent. If you love a Brand X product, tell me whether you received it free from the manufacturer, or whether you paid for it yourself. If you didn't pay for it, are you really free to say what you want?
Tuesday, October 13, 2009
The New York Times has carried a couple of stories in the past week that really brought this issue to my attention. A week ago, the paper ran an article by Julie Creswell on the flipping of Simmons Mattress Co., and then last Friday, there was an article by Geraldine Fabrikant on the venerable Maine boat-builder Hinckley Yachts.
Simmons will soon file for bankruptcy protection, while Hinckley may yet avoid that fate. But in both cases, there was nothing wrong with the underlying businesses, only with the debt that a series of private equity firms loaded onto them.
In the case of Simmons, Creswell reports that Thomas H. Lee Partners of Boston, which bought the venerable mattress maker in 2003, "has pocketed around $77 million in profit, even as the company's fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise."
Meanwhile, Simmons bondholders are expected to lose more than half a billion dollars, and more than one-quarter of the firm's workforce was laid off last year.
Hinckley, family-owned until 12 years ago, was hit hard by the deep recession that makes buyers less inclined to spend between $400,000 and $4 million for a yacht, but has been nearly crippled by its debt burden. This year, "for the first time since the mid-1990s, it will have a taxable loss of about $4 million." Most devastating to the small town of Southwest Harbor, Me., where Hinckleys have been built since the firm's founding in 1928, it has halved its work force from 625 in mid-2008 to 305.
At the height of the real-estate boom, there were many article decrying the greed of homeowners who flipped houses right and left for the quick cash. Flipping businesses risks devastating whole communities. It's not simply greed -- although that's certainly part of it -- but the economics schools that held that the only score that mattered in evaluating a deal was whether it enhanced shareholder value, and by how much.
Shareholder value is important, but American capitalism is at more risk from such blinkered thinking on the right as it is from any socialist political thought. A company is more than simply its balance sheet, especially in small communities like Mableton, Georgia (where Simmons had one of its factories) and Southwest Harbor, Maine.
Saturday, October 10, 2009
Today's news brings two columns worth reading side-by-side. Over at the New York Times, Joe Nocera asks whether "banks have no shame"; his answer, sadly, is no. Meanwhile, at Salon, Glenn Greenwald refers to bankers as, de facto, "the government's owners."
Nocera is rightly offended that the banks, which were rescued by the government under terms that were "extremely favorable" to them, are objecting to plans for a new consumer financial protection agency. He's upset at the banks for apparently not appreciating what they've received, and he's upset at Congress for not being tougher on the banks. And Nocera's saddened that Barney Frank (D-Mass.) "abandoned the so-called reasonableness standard, which would have forced bankers to make sure their customers both understood the products they were buying and could afford them. Mr. Frank has said that such a provision would put bankers in an 'untenable position.' Yet that is precisely what brokers are required to do when they sell a stock or a bond to their customers. Why shouldn’t the same standard apply to a banker making a mortgage loan?" (The reason, of course, is that Rep. Frank needs the votes of conservative Democrats.)
Greenwald complains that the banks have become the government's owners. He -- like Nocera -- quotes Simon Johnson, a former chief economist of the International Monetary Fund, whose May 2009 article in The Atlantic refers to a "quiet coup" by bankers. Johnson claimed that the U.S. was well on its way to becoming a "banana republic" and argued,
"Top investment bankers and government officials like to lay the blame for the current crisis on the lowering of U.S. interest rates after the dotcom bust or, even better—in a 'buck stops somewhere else' sort of way—on the flow of savings out of China. Some on the right like to complain about Fannie Mae or Freddie Mac, or even about longer-standing efforts to promote broader homeownership. And, of course, it is axiomatic to everyone that the regulators responsible for 'safety and soundness' were fast asleep at the wheel.
"But these various policies—lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership—had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector."
Greenwald agrees, and notes that Sen. Dick Durbin (D-Ill.) has said that the banks "are still the most powerful lobby on Capitol Hill. And they frankly own the place."
It's been a long time since I was so naive as to think that American citizens owned the government, but that banks, despite nearly trashing the economy, could still hold onto the reins of government, is deeply shocking.
Friday, October 9, 2009
This morning, my husband got a phone call from the National Rifle Association. Since we're both registered Democrats who voted for (and contributed small amounts to the campaign of) President Barack Obama, and card-carrying members of the American Civil Liberties Association, your first thought might be, "Gee, the NRA doesn't do as good a job of list-cleaning as I'd have thought."
Which was, honestly, my first thought too. Which is why I laughed.
The call turned out to be a "poll". But first, the woman from the NRA told my husband, he should listen to a message from Wayne LaPierre, the executive vice president of the association. The message, my husband reports (sorry, I know this would be considered "hearsay evidence" and therefore inadmissible in a court of law), was that the United Nations is secretly developing a plan to ban guns worldwide, and will be coercing the United States to approve it too, unless, of course, patriotic Americans take steps now.
Then came the poll: Yes or No, Is it right for Third World dictators and Hillary Clinton to determine what rights Americans have?
I had to laugh again. If only the United Nations had such power!
But then I got mad again.
In a previous life, I worked in marketing research -- for a car company, for several advertising agencies, and for a couple of consultancies and marketing research suppliers. Overwhelmingly, the people in the business are deeply concerned with real research: with understanding the wants and needs of consumers and how marketers can better serve them. All of us were endlessly frustrated by what we called "sugging" (Sales Under the Guise of research) and "frugging" (Fund Raising Under the Guise of research). Both gave marketing research a bad name, and made it harder for us to do our job properly, as consumers became increasingly suspicious of any phone calls that began with "Hi, I'm calling from XYZ Research and I'd just like to ask you three quick questions."
But "push polls" like this one from the NRA are even worse. The NRA presents itself as "America's oldest civil rights organization", whose mission is "to preserve and defend the U. S. Constitution, especially the inalienable right to keep and bear arms guaranteed by the Second Amendment." Its webpages are filled with information for members, candidate ratings and endorsement, and news. Will the results from this "poll" be presented as "news"?
Growing up, as I did, in rural New England, I knew plenty of hunters. Many of them were NRA members, and some of them were right-wing in their politics (I'm old enough that most were members of the now-nearly defunct breed of New England Republicans: fiscally conservative but socially liberal). They would all have been appalled by this sort of fakery.
Push polls don't just have a negative effect on the whole research and polling industry; they have a similar effect, in the end, on the sponsoring organization. Remember that old saw: You can fool all the people some of the time, some of the people all of the time....? While a sermon based on lies can go over just fine with the choir, the congregation eventually gets uncomfortable. And finds a new church.
In the old days -- assuming you cleaned your lists properly! -- you might be able to get away with this. These days, you have to assume that someone who doesn't belong to the choir will hear the sermon ... and will be happy to publicize your, um, exaggerations.
Tuesday, October 6, 2009
The Times article references one blogger, Christine Young, of Lincoln CA, who writes the "From Dates to Diapers" blog. Soon after she began, "[the] free products soon started arriving, and now hardly a day goes by without a package from Federal Express or DHL arriving at her door, she said. Mostly they are children’s products, like Nintendo Wii games, but sometimes not. She said she recently received a free pair of women’s shoes from Timberland. Ms. Young said she had always disclosed whether or not she received a free product when writing her reviews. But companies have nothing to lose when sending off goodies: if she doesn’t like a product, she simply won’t write about it."
I have nothing against Ms. Young (I don't know her, and have never read her blog), but that's a long way from what I'd call "full-disclosure blogging", which is the only kind of product-review blogging there should be. I've written about this question before (click here to see the old post), and, to me, "full-disclosure" means just that. If I were to start reviewing products (not that I expect to), I would owe it to my readers to tell them whether I paid for it, received it as a gift from a friend, received it as a gift from the manufacturer, or whatever, because that how will undoubtedly affect my evaluation, no matter how much I try not to let it. This is why Consumer Reports magazine insists on buying the products it reviews off the shelf and why it doesn't accept paid advertising (I've been a Consumer Reports subscriber for many years; that is my only connection with the magazine).
If Ms. Young doesn't write about a product, how are her readers supposed to know whether she's not written about Product X because she hasn't tried it yet or because she didn't like it -- which are rather different critters, and it's more than disingenuous of her not to acknowledge that difference.
The new FTC rules will also apply to, for example, celebrities who Tweet about "favorite" products online. They too will have to disclose any corporate ties. 'Bout time, say I.
Monday, October 5, 2009
The article is based on a paper by four researchers at the UK's Nottingham School of Economics (available online here), which finds that "apologizing yields much better outcomes for the firm than offering a monetary compensation."
The researchers worked with a large firm selling products on Germany's eBay site. When customers were dissatisfied with their transaction, posting an online comment to that effect, they randomly received one of three responses: an apology, a small amount of money (2.5 Euros), or a larger amount of money (5 Euros); all three groups were then asked to remove their negative online evaluation. None of the respondents were aware that they were participating in an economic experiment.
The result? More than twice as many customers who received an apology withdrew their negative comments compared to customers who received cash (45% vs 21%).
Business Week quotes Johannes Abeler, a Nottingham research fellow and one of the authors of the study, as noting that the emailed apologies were effective "even though they were brief and impersonal -- and asked for something in return."
This doesn't surprise me. I've had a lot of experience in customer satisfaction policy and research, both on the corporate and supplier sides. Here's an important example:
Years ago, I was working late putting together a presentation, when the phone started ringing in the customer relations department, whose offices were right next to mine. Eventually, more because the noise was distracting than anything else, I answered the phone. Relieved that she had finally reached someone, a woman poured out her story of how the product had failed, and what it would cost to repair, and yes it was out of warranty, but what was she supposed to do.
When she finally paused for breath, I said, "I am so sorry. What a terrible thing to happen!"
There was a brief, surprised, pause, and she said, "Thank you. All I really wanted was for someone to acknowledge that I had a real problem."
We worked something out for her -- I don't remember the details -- but her comment stayed with me. She was upset and angry, but she wasn't really looking for an immediate solution; she was looking for affirmation and an apology.
Tuesday, September 29, 2009
I don't know about you, but I get queasy when companies start trying to tell me why I should trust them.
Kiley and Helm report that "...[in] the world of branding, trust is the perishable of assets. Polling in recent months shows that increasing numbers of consumers distrust not just the obvious suspects -- the banks -- but business as a whole."
Gee, given that we're still immersed in one of the deepest recessions ever, that seems really surprising, doesn't it?
"Even before the economic meltdown, companies with trust issues began realizing they couldn't keep talking past the problem with slick television commercials," the article continues. An example the authors provide is McDonald's, which has reportedly begun working with some of its long-time critics, including People for the Ethical Treatment of Animals (PETA). "McDonald's used its influence to force egg suppliers to raise the living standards of hens and cease debeaking them. PETA has publicly lauded the company for its efforts."
I must be getting cynical in my old age, but this sort of effort -- while, indeed, praiseworthy -- doesn't make me "trust" McDonald's any more than I did before.
Trust is multi-faceted, and once lost, as I know I've written before, not easily regained (remember that old saw: "Fool me once..."?). One of the key elements of trust is transparency, and most corporations are deeply uncomfortable with transparency (if only because it makes CYA so much more difficult). Moreover, making an active effort to build trust can easily backfire and be read as just so much more spin.
Trust, after all, isn't something that suppliers tell clients about. It's clients who reward the best suppliers with their trust.
Sunday, September 27, 2009
I logged on today, and it's terrific; I can't recommend it highly enough. (WGBH website is here; the episodes are also available at justiceharvard.org, which also offers beginner and advanced discussion guides.)
According to the Times article, by Patricia Cohen, the lectures being used were taped in 2005 and 2006 and were "first used for Harvard's Extension School and for alumni."
Prof. Sandel begins with some classic ethical hypothetical stories: Imagine you are the driver of a runaway trolley car, whose brakes have failed; if you continue down the current track, you will hit five workmen and kill them; alternatively, since the steering is functional, you could turn down a side track, in which case you would strike and kill "only" one workman. What should you do, and why?
Other questions that are raised include: Can a case ever be made for cannibalism? What's the value -- in dollars -- of a human life? What happens to "natural rights" when we agree to join society and abide by society's laws?
Yummy, yummy stuff.
Friday, September 25, 2009
Today's New York Times carries a report by Gardiner Harris and David Halbfinger with this "surprising" headline: "FDA Reveals It Fell to a Push by Lawmakers". Similar articles were published in the Wall Street Journal and elsewhere (click here for WSJ article and here for Bloomberg News report).
According to the article, agency scientists who opposed approving the "Menaflex" device for sale in December of last year were overruled by agency administrators, responding to "extreme" and "unusual" (the adjectives come from the FDA's own report) pressure from New Jersey senators Robert Menendez and Frank R. Lautenberg and congressmen Frank Pallone Jr. (District 6) and Steven R. Rothman (District 9). All four are Democrats. The agency's report also accuses its former commissioner, Dr. Andrew C. von Eschenbach, of acting improperly.
The legislators and the former commissioner have all said that they acted appropriately.
Menaflex is a device designed to "guide new tissue growth" in a torn or otherwise damaged medial meniscus, the cushion between the knee bones. It is manufactured by ReGen Biologic, a Hackensack NJ-based company.
Unfortunately, clinical trials failed to show that the $3,000 Menaflex device worked any better than routine surgery. The agency is now reconsidering its decision to approve the device. According to the Times, "the agency has never before publicly questioned the process behind one of its approvals, never admitted that a regulatory decision was influenced by politics, and never accused a former commissioner of questionable conduct."
As Captain Renault (Claude Rains) told Rick (Humphrey Bogart) in 1942's Casablanca, "I'm shocked, shocked to find out that gambling is going on here!" just as the croupier hands Renault his winnings, we're "shocked, shocked" to learn that government officials are susceptible to pressure from senators and congressmen, aren't we?
Wednesday, September 23, 2009
According to Peter Goodman's article in today's New York Times, economists Joseph Stiglitz and Amartya Sen, both Nobel Prize winners, have just released a report arguing against the use of Gross Domestic Product (GDP) as the sine qua non measure of economic health.
By focusing purely on GDP (the quantity of goods and services an economy produces), Sen and Stiglitz aver, "many societies ... [have] failed to factor in the social costs of joblessness and the public health impacts of environmental degradation."
The late, great H. L. Mencken once wrote, "There is always an easy solution to every human problem—neat, plausible, and wrong." And an "easy solution" is exactly what GDP is. If you're trying to determine how well your society is doing, there are all kinds of measures you could use. Start by defining your terms: What exactly do you mean by "doing well"?
Particularly in a society as complex as the United States, it's hard to know where to start. Our Declaration of Independence holds it to be "self-evident" that we have the right to "life, liberty, and the pursuit of happiness", so ... does economic "wellness" really matter more than physical "wellness"? And what about "happiness" -- how does one measure that?
Goodman quotes Stiglitz as saying, "What you measure affects what you do. If you don't measure the right thing, you don't do the right thing." Sometimes we measure the wrong thing because measuring the right one is too hard. But then the "wrong" thing takes on a life of its own as the "important" thing.
What's wrong with GDP? Where to start, where to start...
GDP measures economic activity, the production of goods and services that are traded in the marketplace. Which means that anything that can't be priced isn't measured. So what's the value of, say, the person who stays home to raise a family? Obviously -- by the GDP model -- nothing, because that person isn't compensated (monetarily) for his or her work. That's not good economic thinking, that's cynicism (as Oscar Wilde put it in Lady Windermere's Fan, a cynic is a "man who knows the price of everything and the value of nothing.").
Not only does GDP not provide a properly-nuanced picture of a society's economic wellness (let alone any other aspects of its wellness), it doesn't consider the question of sustainability. Can anything, even an economy as large as that of the United States, grow indefinitely without any negative side effects? Name anything that could grow indefinitely without negative side effects.
Stiglitz said, "Your measure of output is grossly distorted by the failure of our accounting system. What began as a measure of market performance has increasingly become a measure of social performance, and that's wrong."
Focusing on maximizing GDP alone is as foolish as focusing only on "maximizing shareholder value" by looking for new and ever more creative ways to boost share prices. Wall Street loves it when I cut costs, so why don't I lay off another 1,000 employees? Sure enough, Wall Street will reward me, because the societal costs of 1,000 new members of the unemployed isn't part of the share-price calculation.
Friday, September 18, 2009
This quote from Scottish poet Robert Burns came to me when I saw this "surprising" headline from The Wall Street Journal: "Bankers Wary of Fed Pay Proposal".
The article, by David Enrich and Dan Fitzpatrick, posted this afternoon (available here), reports that "some" bankers have "reacted warily" to the news (Washington Post article here) that the Federal Reserve will review, and may restrict, pay policies for thousands of employees of the nation's largest banks.
Bankers still seem to have a hard time seeing themselves as others see them. While most of us not employed on Wall Street blame the risks that bankers took for much of the financial mess we now find ourselves in -- and compensation packages certainly encouraged bankers to take on outrageous risks -- bankers themselves seem to blame everyone but themselves.
Sure, they say, bad things happen. But that's just the way things are. Now that everything's fixed, can we just go back to making money?
The Journal article quotes Peoples Bank president and CEO Chevis Swetman as predicting that the Fed plan "will harm the industry's ability to attract talented employees", and notes that Peoples' already ties compensation to performance, and that therefore its CEO's bonus dropped from $59,577 in 2007 to $30,375 in 2008, and that he expects no bonus this year.
Note that Peoples did not accept any bailout funds.
It seems to me that the Fed plan is a response to the current "heads I win, tails you lose" situation in banking: when banks are at risk of failing, they turn to the government (and therefore to taxpayers) to help bail them out, but when they return to profitability, they want to keep all the gains for themselves. As one of those taxpayers, I'd just like to say, "Hey! Wait a minute!"
To be sure, the Journal writers did find some bankers who applauded the plan, including Steve Steinour, chief executive officer of Huntington Bancshares: "I like it.... Having disciplined pay practices is good for the country long-term."
That addresses the second half of what I'd like to say to Peoples' Swetman: tying compensation to performance is a fine idea, but as with many ideas, execution counts. What performance exactly are we talking about? Next quarter's stock price? Or something a little more long-term and a little more solid?
The Post's Neil Irwin points out that the Fed plan, which is expected to be approved shortly, is separate from other government efforts to rein in what most of us would call excessively lavish compensation in financial services: "The Treasury Department is weighing how to restrict pay at firms that have received money from the $700 billion financial system bailout. And Congress is weighing legislation that would curtail pay to executives."
Sunday, September 13, 2009
Concerns about health hazards, particularly for infants and fetal development, have led many to eschew reusable plastic water bottles such as those manufactured by Nalgene in favor of aluminum bottles by SIGG.
I'm not going to address the science and the safety -- that's not my area of expertise -- but I do want to address a question of ethics.
The BPA concerns were bad news for Nalgene but, of course, good news for SIGG sales. And while Nalgene started phasing out its polycarbonate containers with BPA in April 2008 (see company announcement, here), a great deal of damage had been done.
And now we learn that SIGG's aluminum containers had liners that, until August of last year, were made with plastic containing small or trace amounts of BPA. SIGG did not market its bottles as "BPA-free", but seemed content to let consumers assume that the bottles were BPA-free.
When the story broke, SIGG's CEO Steve Wasik posted an open letter in August (here) "explaining" the history of BPA use in SIGG bottles.
Many customers felt betrayed (see examples: here from Hartford's examiner.com, here from the Boston Globe's environmental blog, here from greenerdesign.com -- an article that was picked up by Mother Jones here, and here from Toronto's treehugger.com). And not surprisingly, many customers were not satisfied with Wasik's explanation. As the Globe's Beth Daley wrote, "Any parent would want to know if a drinking container contained such a controversial chemical. If you are going to bill yourself as an eco-friendly company, be eco-friendly. And that includes being straightforward. Otherwise you’ll lose customers. You've lost this one."
Greener Design's Simran Sethi pointed out that "at no point over the last few years, in the handful of conversations and email exchanges I have had with SIGG's PR company, Truth Be Told, were my perceptions that the bottles were free from BPA corrected." For that matter, according to Sethi, Truth be Told hadn't been told the truth either, quoting one of the PR firm's staffers as follows: "As you can imagine, we were surprised and disappointed as well -- we found out this information only a few days before you did."
A second letter from Wasik was posted on 1 September (here). In it, he acknowledged that "although SIGG never marketed the former liner as 'BPA Free' we should have done a better job of both clearly communicating about our liner as well as policing others who may have misunderstood the SIGG message." More importantly, he said, "I am sorry."
It took a while for him to get there, didn't it? That, of course, is where he should have started (at least, it's where he should have started as soon as he realized that people might get the wrong idea about SIGGs and BPA).
Wasik also announced an "exchange program", effective through the end of October, by which customers can turn in their old SIGG bottles for new ones (and by the way, you'll have to pay for shipping the bottle to North Brunswick NJ because, as the SIGG site explains, "this is a voluntary program -- not a recall." Can you say, "Adding insult to injury"? Sure you can.).
Wasik also said that "for over 100 years, SIGG has earned a reputation for quality products and services -- and we do not take that for granted." But it seems as though the company did just that, doesn't it?
And he ended his letter by adding, "All of us at SIGG hope that we will have an opportunity to regain your confidence and trust."
As I said in a previous post, trust is much easier to lose than to regain.
Friday, September 11, 2009
You may argue about the adjective, "rife" -- according to the article, the percentage of ghostwritten articles in major medical publications ranges from 2 percent (Nature Medicine) to 11 percent (The New England Journal of Medicine), but it is nonetheless depressing.
"In the scientific literature," as Wilson and Singer note, "ghostwriting usually refers to medical writers, often sponsored by a drug or medical device company, who make major research or writing contributions to articles published under the names of academic authors. The concern ... is thtat the work of industry-sponsored writiers has the potential to introduce bias, affecting treatment decisions by doctors and, ultimately, patient care."
As you probably know by now, my mantra is "Transparency". I don't doubt that there are many highly ethical writers working for drug or medical device companies, who contribute considerable knowledge to published articles. My complaint is simply that I don't know about them.
According to the Times article, the study which revealed this flurry of ghosting was conducted by the editors of the Journal of the American Medical Association (aka JAMA), which posted an online questionnaire. The authors of more than 600 articles responded (anonymously); of those, approximately 8 percent "acknowledged contributions to their articles by people whose work should have qualified them to be named as authors on the papers but who were not listed."
I'm not saying that all those contributors had nasty ulterior motives that they were hiding. But wouldn't you like to know if, say, it was a Pharma A company employee who was giving a glowing report to Pharma A's product? Maybe the product deserves that glowing report; maybe it doesn't. But you deserve to know about the reviewer.
Wednesday, September 9, 2009
I've been thinking about issues of trust a lot lately. What prompted this particular post is a book review in the current (14 Sept) issue of Business Week magazine. BW writer Burt Helm reviews Women Want More, by two Boston Consulting Group partners (Michael J. Silverstein and Kate Sayre) with writer John Butman. The opening paragraph of the review includes the following:
"...[The] work unintentionally raises a pair of important questions: How rigorous does research for business books need to be? And does it matter if the authors have much that's original to say?"
The first question is what caught my eye -- I'd probably have skipped the review otherwise (as a woman, I'm tired of being "part" of titles like Women Want More). I was a market researcher in a previous life, and have had many conversations about what makes for solid research and what doesn't. For example: what's a valid sample size?
Academic research in the social sciences is often built on what corporate market researchers consider to be woefully inadequate sample sizes. A friend, who wrote a book in 2002 on women who earn more than their husbands (Breadwinner Wives and the Men They Marry) , interviewed some 60 couples before writing it. I remember her saying that her academic friends were all impressed that she had such a large sample, while her market research friends all complained that her sample size was too small.
In this case, the BCG partners say that they had surveyed more than 12,000 women. Which sounds great, except that questions raised by Business Week "have prompted an amended version of the book that could be in stores, according to publisher HarperCollins, within days of the first printing."
For example, some material in the book appeared to have been taken from Wikipedia, while other information came from an academic paper published nine years ago (without proper attribution). The authors claim that most of the "questions" raised by the magazine represent honest errors which will be addressed in the revised book. If they've done that, can we trust what they say they've done in the way of quantitative research? (For what the authors say about their survey methodology, click here.)
Helm's review (co-written with John Cady), closes by saying that "...[These] kinds of glitches, on top of the unimaginative analysis that run through much of Women Want More, add up to a disappointing performance by Silverstein and Sayre, two senior executives at a respected consulting firm."
If I were one of their fellow partners, I would be concerned about the effect that such a review (and such a book) could have on the overall reputation of the firm. BCG is not just a well-known firm; it's highly respected, and its opinions are valued and trusted. For which the firm can charge handsomely.
If I were a BCG client, I think I'd be wondering whether I really got what I paid for. Do I still trust them as I did before? And what, exactly, can they do to earn that trust again?
Saturday, September 5, 2009
Big surprise -- so far, I haven't seen it.
For those of you who haven't followed the story (a sample of newsreports are here, here, and here), this was, as Gardiner Harris of the New York Times notes, "the largest health care fraud settlement and the largest criminal fine of any kind ever."
According to the government's investigation, Pfizer actively promoted Bextra for off-label uses by providing all-expenses-paid trips to doctors, and even kickbacks.
What makes this especially upsetting? A couple of items:
(1) This is Pfizer's fourth settlement regarding illegal marketing activities since 2002.
(2) 2002 is the year that Jeffrey Kindler joined Pfizer, as executive vice president and general counsel. I don't want to assume that ethics is not taught at Harvard Law ( from which Kindler graduated, magna cum laude, in 1980, and at which he was an editor of the Harvard Law Review), but if there was an ethics requirement, I'm thinking he didn't pass....
(3) The settlement may be huge to your eyes and mine, but it represents less than three weeks of Pfizer's sales, according to the Times.
(4) What happened to the companywide corporate integrity statement that Pfizer signed in 2004 (in conjunction with a $430 million fine over improper marketing of its epilepsy drug, Neurontin)?
The point is that while a great many people in Pfizer sales are responsible for the illegal marketing activity surrounding Bextra and other drugs, given the company's history, I don't see how it could have occurred without (at the very least) a wink-and-a-nod from the top.
The Times quotes one of the Pfizer whisteblowers, John Kopchinski, as follows: "The whole culture of Pfizer is driven by sales, and if you didn't sell drugs illegally, you were not seen as a team player."
I'd say it's time for regime change at Pfizer. Hello, board -- Are you listening?
Tuesday, September 1, 2009
Back at the dawn of time, a "promotion" meant three things: more responsibility, a "better" title, and a higher salary. These days, "promotion" appears to mean only two out of three, and the higher salary isn't one of them.
In the past six months, three of my friends have been "promoted" to "better" positions with important new responsibilities. Which is great, except that they still have to do their old job, too.
I realize that times are tough out there, and that every business that's trying to stay in business is looking for ways to do more with less. But "human capital" is not the same as economic capital: it gets tired; it gets cranky; and it wants recognition for the hard work it is putting in.
Do the human resources departments that come up with the fancy new titles think that we're so gullible that we'll be caught up in the excitement of the new business cards ("Look, honey, I'm a senior director now!"), that we won't notice that we are now doing two jobs for the price of one? I'd like to think that they're smarter than that, and I'd hate to think that they're that cynical.
In at least one case, I believe that the corporate situation was dire. If "asking" your employees to take on double jobs (I'm putting that "ask" in quotes, because, especially in this job market, if you're "asked" to do two jobs, can you really say, No?) is truly a stop-gap emergency measure, then the company owes it to those employees to say so: "I know that what we're asking isn't fair. But here's why I think we'll have turned the corner in six months, and here's what I'm going to do for you then." Most people can handle six months at double-time (or whatever the time frame is -- as long as they know what the time frame is). What people can't handle is uncertainty. Is this "emergency" measure going to last a week, a month, a year? Or will the company conveniently "forget" once the moment of urgency is past?
No matter what your business, your employees are your greatest strategic resource. You deserve their loyalty and hard work, and I guarantee you'll get it -- as long as you give them your loyalty and appreciation.
Monday, August 31, 2009
I've been thinking about this for several weeks, ever since the news broke last month that long-time Hartford Courant columnist George Gombossy had been fired. The former consumer watchdog alleged that he was fired for writing a negative story about a major advertiser (he subsequently published the story himself, on his Connecticut Watchdog blog; the post is available here). The Courant's management called Mr. Gombossy's complaints those of a "disgruntled employee" and said that they were replacing Mr. Gombossy's position with one that would "go to more helpful news, and less gotcha news", and that Mr. Gombossy had not been interested in the new position (see Stephanie Clifford's New York Times article on the disagreement, here).
Which picture is the true one? Not having been a fly on the wall in the Courant meeting rooms, I can't say for sure. But at a time when every newspaper seems to be in a fight for financial survival, and when fewer and fewer newspapers are owned by individuals or families who care about being publishers more than about making a huge profit, I know which side I lean toward believing (the Courant, which began publishing before the Revolutionary War, was purchased by the Chicago-based Tribune Co. in 2000).
I don't want to minimize the problems that newspapers face. I love newspapers -- my first job out of college was as a newspaper reporter and photographer for a regional daily, and I still get a rush from printer's ink. I get upset every time I hear of a great paper folding.
But it's not as though advertisers haven't been pushing against that "Great Wall" since the wall first went up. No one likes hearing bad stuff about themselves, and advertisers are, not surprisingly, inclined to resent finding negative news articles in the same venue where they are paying for their presence. "For this I paid #XX?" they think. That's understandable.
It's also wrong.
As Gombossy states on his blog (full text of his post is here): "Advertisers don’t take out ads because they like the columnists or reporters. They take out ads based on a newspaper’s circulation, which is based on its credibility. The less credibility a newspaper has, the less readers it should have."