I just read a post from Forbes’ Hana Alberts on Alizila, a homegrown company news site for the Alibaba Group. Alibaba has hired an experienced journalist, Time Magazine veteran Jim Erickson, to develop the articles for the site:
Erickson isn’t “selling out” in the traditional sense of the word, that is, he’s not morphing into a press release writer or a corporate communications executive. He will instead remain a reporter — just one who’s getting a paycheck from the only company on his beat. Call him a corporate journalist.
…
Erickson, who co-wrote a biography of Bill Gates, is the managing editor of the site — and, at the moment, its only writer. Alibaba, which believes this initiative is the first of its kind, say it’s not a marketing tool but rather a “quasi-independent news outlet.”
“All my life I’ve known journalists who have gone over to what we call ‘the dark side,’” Erickson says. After 25 years in journalism and a brutal layoff, he felt Alibaba offered him a middle ground: “I could still be a journalist, but I wouldn’t be subject to the same constant financial pressures.”
I’ll give this to Alibaba Group: I think they’re one of the few Chinese firms that gets international PR. Granted Alibaba is not cut from the same cultural cloth as the big SOEs and red-chip firms, but even controlling for that they’ve done a good job telling their story.
Although it still feels like a work-in-progress (and is labeled “beta”), Alizila is a good idea. This is the digital age, and as mainstream media are stretched ever more thinly companies need to get better at telling their own stories directly to the audiences that matter to them.
But I wonder about two things. First is the effort taken to stress that Mr. Erickson remains a journalist and not a PR person. As a PR person, when I look at this site I see PR: A house platform for telling stories about the company and making the company more visible.
In the end, can you be a journalist in the sense most of us understand it and report impartially on a daily basis on the company cutting your paycheck? What will happen when there’s a real crisis or serious problem that demands coverage or investigation? What will happen the first time someone in an executive suite wants to kill or amend one of Mr. Erickson’s stories?
Some of the stories on Alizila do delve into Alibaba’s challenges, but none of them is what I would call confrontational. Ms. Alberts quotes Mr. Erickson remarking on an Alizila article he wrote on Alibaba’s efforts to tackle counterfeits on the site, saying, “I’m certainly not going for the jugular, but if you’re in PR it goes against every instinct in your body, because you are drawing attention to the fact that there are fakes on the website.”
I’m in PR, and as an outside observer it doesn’t go against every instinct in my body. The availability of pirate goods on Alibaba isn’t a secret that’s being suddenly revealed. Personally, I’d see a post on steps the company is taking to control a known problem, even one that embeds some criticisms or discusses past problems, as generally positive. If that story had been on a third-party news site, I’d grade it as positive with regards to Alibaba because of the emphasis on the company’s actions to resolve the problems and the positioning of the piracy problem as a widespread issue afflicting the entire industry (a classic PR technique, “broadening”). If it had been a story earned through PR, it’d be good PR.
The second question is why jump through hoops to make this look like a news site rather than harnessing Mr. Erickson’s talent and experience as a straightforward company blogger? He could cover the same topics, dig into general industry news, use a more engaging voice, and probably achieve similar visibility results for the company, without having to maintain what to me seems like an unsustainable air of impartiality. He could be an advocate in the best possible way.
Perhaps it has to do with how the audience they’re trying to reach will perceive a blog as against something that looks like a news site (although they’re also active on several conspicuously American social media networks). Or perhaps it’s simply the approach that everyone is comfortable with. There is a blog on Alizila, but although the posts seem shorter than the “news” articles, the voice is similar.
Ultimately, Alizila is PR. There’s nothing wrong with that. They should embrace it and be proud. Get past the “dark side” stuff. Good, honest communication and good storytelling are both part of good PR. And there is certainly a role for journalistic skills in good PR, nutting out the stories and telling them well (which is why our industry is full of ex-journalists, although Imagethief is not among them). But trying to distance such efforts from PR strikes me as disservice to PR and journalism alike.
With all that in mind, I think Alizila is interesting, especially coming from a Chinese company. I’m curious to see where they take it and if they launch a Chinese version.
For sheer surreality you gotta love Hollywood. And I’m not even talking about the films. Two PR-worthy Hollywood moments to remark upon today. First, the imminent arrival of the needless remake of cold war teen action flick Red Dawn has finally caught the attention of the Chinese press. Western media are reporting that the chest-thumping Global Times has published not one but two editorials slamming the movie:
“U.S. reshoots Cold War movie to demonize China” and “American movie plants hostile seeds against China,” read the Monday and Tuesday editorials in the Beijing-based Global Times, whose daily circulation, in Chinese and English editions, is about 1.5 million.
Coming on the heels of secretary of state Hilary Clinton’s China visit, the commentaries said the $42 million film, directed by Dan Bradley and starring Connor Cruise (son of Tom Cruise and Nicole Kidman), “is deeply rooted in Americans’ fear of China’s rise.”
“Despite the world’s focus on U.S.-China relations in the strategic and economic dialogue and their increasing economic connections, China can still feel U.S. distrust and fear, especially among its people. Americans’ suspicions about China are the best ground for the hawks to disseminate fear and doubt, which is the biggest concern with the movie ‘Red Dawn,’” one commentary said.
Well, maybe. Imagethief prefers to think that the remake of Red Dawn is rooted less in Americans’ “fear of China’s rise” than in Hollywood’s lack of imagination and desire to make a buck. But there may be some relationship between the two. I also understand the knee jerk instinct to issue fierce denunciations of the film in the interest of national pride, global harmony, etc. And considering that there was some chatter about this film here in China last March I’m actually kind of surprised it took this long.
Nevertheless, once again the best PR advice in this situation would have been to shut up. From Hollywood’s point of view, having the nationalist cousin of the People’s Daily rail against the film is better marketing than getting a picture of Connor Cruise with an assault rifle and one of those tractor-pull girls stamped on the forehead of every teenage boy in America. The US press is bound to report on it and it will do nothing but stoke the buzz of the movie back home. This is yet another classic example of “PRing the problem”. Even assuming the objective is to show domestic audiences that the powers-that-be are appropriately outraged, it’s counterproductive on some level.
But Imagethief isn’t just here to criticize. Like all good consultants (or, former consultants), I come bearing solutions! There is a far, far better way for the Chinese to combat these kinds of silly, sinophobic movies. A way that would make Sun Tzu himself stroke his beard in appreciation. That is for the Chinese to seed their spies throughout Hollywood, use blackmail and honey-traps to build influence in the great Hollywood talent agencies and, whenever they get word that a project they don’t like is going into develop, use their leverage to ensure that Kevin Costner gets attached to it. Problem solved.
Speaking of Kevin Coster, who has apparently invested heavily in the development of a technology for helping to clean up oil spills, that brings us to our next topic: The great oil spill. (Imagethief is good for artful segues, if little else.) For some reason, this spill has been bringing the Hollywood technologists out of the woodwork. James Cameron, director of a relentless string of uber-hits and serial inventor of motion picture technologies, recently offered his expertise to BP, who are currently wrestling with a small problem at the bottom of the Gulf of Mexico. In fact, BP’s string of recent failure is something like the mirror-world reflection of Cameron’s own success. From the New York Times:
“Over the last few weeks I’ve watched, as we all have, with growing horror and heartache, watching what’s happening in the Gulf and thinking those morons don’t know what they’re doing,” Cameron said at the All Things Digital technology conference.
Cameron, the director of “Avatar” and “Titanic,” has worked extensively with robot submarines and is considered an expert in undersea filming. He did not say explicitly who he meant when he referred to “those morons.”
His comments came a day after he participated in a meeting at the U.S. Environmental Protection Agency headquarters in Washington to “brainstorm” solutions to the oil spill.
Cameron said he has offered to help the government and BP in dealing with the spill. He said he was “graciously” turned away by the British energy giant.
Well, after calling them “morons”, he’s not likely to be invited back. Nevertheless, as the article points out, Cameron’s involvement is not as totally ridiculous as it appears at first 3D look. The guy has backed a lot of underwater R&D. Arguably, investing in the development of remotely operated vehicles for filming is not quite the same as remotely operated vehicles for capping runaway oil wells, but nevertheless it wasn’t totally zany. If you think of him as an “underwater documentarian” it all makes much more sense than if you think of him as “director of Avatar“. Forgive me, but I’m a PR man. This is how my mind works.
I can, however, understand why BP turned the guy down. This is Jim Cameron we’re talking about, after all. Whatever you think about his movies, the guy is a force of nature. I mean, what if he actually fixed it? Headline: Hollywood director rescues flailing oil firm. BP would be finished. Forever.
The ocean be damned, that was a PR risk they just couldn’t take.
From time to time Imagethief gets a note from an American or English student who thinks that a career in PR in China would be just the ticket and wants some advice as to how to get into the field. This week I had two such inquiries. The first got a carefully written note answering his questions in detail. The second got a paragraph followed by a cut-and-paste of the note that went to the first one.
I wasn’t just being miserly, although I can be miserly when called upon. The people writing me may come from different circumstances, but they tend to ask similar questions and get the same basic advice, which is generally applicable to most young foreigners looking to build a PR career in China. It makes sense to put some of that information into a blog post so that it is more broadly available and so I don’t have to write the same response over and over.
With that in mind, here is my advice. Bear in mind that this advice is for foreigners looking to break into PR in China. The conditions are different for Chinese applicants. Also, the following reflects my own inclinations. Other people may take a different approach, and your mileage may vary.
First, be able to explain why you’re fascinated by PR
I wrote all the China stuff below and then it occurred to me that I hadn’t included this most basic of conditions. But you’d better be prepared to discuss why you’re fascinated by (not just interested in) public relations. Know something about the key players in the industry. Be able to explain what PR is, how it works, and what some of the issues the industry is currently facing are. Tell me why you are passionate about PR. Then tell me why you are passionate about doing it in China, of all places. If you tell me it’s because you’re “a people-person” or because you “love to communicate” I may scream in pain. That is because I will have just sprained the muscles I use to roll my eyes.
Be here now*
If you’re already in China or planning to be here, great. If not, plan on bringing yourself out. It sucks, but no one is going to fly a fresh graduate out for interviews no matter how good their GPA. You might get telephone interviews, but most people making hiring decisions will choose someone they’ve met face-to-face over someone they’ve only interviewed on the phone. Even if you have a good phone interview, you’re still going to have to pick up your own ticket in the end. Agencies might seek out and hire experienced domain specialists from overseas, but at the entry level there are plenty of fresh graduates, language students and English teachers looking to make leap already here, so don’t expect someone else to do the heavy lifting. Plan a month in China and arrange interviews while you’re here. Spend your spare time in language school or traveling. Or writing the Great Chinese Novel. It doesn’t really matter. People will be impressed that you were willing to take the risk and bring yourself out.
Naturally, the more time you’ve spent in China already the better. It’s true that Beijing in 2010 (or whenever you’re reading this) is pretty civilized, but it’s still a long way from home. Not everyone who comes here likes it as much as they think they will. One thing I always look for is some sign that you know what you’re getting yourself into. A year or even a summer already spent studying in China is a good start. I want to know that you’re fascinated by China. That your life won’t be complete until you can live and work in China. The (distant) second best option is serious time spent abroad somewhere else, preferably in Asia. The two weeks you spent on a class trip doesn’t impress me so much. I want to be reasonably sure you won’t be here for three months and then freak out because it’s dirty/there are too many beggars/the air is bad/there are recognizable animal parts in the food/[your neurosis here]. I’ve seen it happen.
*With apologies to Oasis.
Prove you have a passion for China
I hinted at this a bit above, but let me spend a little more time on it because it’s important. I’m not so interested in someone who wants to work in China because they think it’s the next big thing or a couple of years in China will look great on their CV or help them get into business school. What I really want is someone who is fascinated by China. A person who is fascinated by China will be able to talk at length about the China books they’ve read, about China journalism, and about why it is that China excites them. (In an interview I’ll always ask which China books a foreign candidate has read, which they liked and didn’t like, and why.) These days every candidate has spent at least some time studying the language, although a caveat about this below. They’ll have opinions about Chinese companies or how China is perceived in the US, even if they haven’t been to China before.
Related to that, another thing I always test for is a good knowledge of current events in China. What issues are important in China at the moment? What are the latest scandals? What’s been in the Chinese news or in foreign news about China? If you follow the reading advice below, this should come naturally. Knowing the headline stuff (Expo is opening next month, Google has troubles here, there was just an earthquake in Qinghai…) is obligatory. If you can take it to the next level (KFC just had a coupon crisis in China, there is a big debate over whether or not there is a property bubble in the major cities, Gao Zhisheng was recently released from jail, Western media is having a Han Han moment, what was that whole deal with Deng Yujiao…) you’ll impress me more.
What if your reasons for coming to China are completely cynical and you’re simply well prepared enough to confidently address all of the above? That works for me too. I’m in business, and one has to be pragmatic. If you’ve got mad skills I don’t care so much if you’re not all infatuated.
Think about what you offer
Not to be harsh, but why am I going to hire you, an entry-level foreigner, with all the extra costs and paperwork and visa BS you will require, over the English-speaking Chinese graduate who wants to join my company? The Chinese applicant probably scored in the top fifth percentile in the Gaokao and went to an elite university. One of my most junior team members was number two in his province, and his province has a population a fifth the size of the United States. Contrary to what you may have heard, you’re not necessarily more creative than Chinese applicants. True, the Chinese educational system isn’t known for being entirely conducive to free-spirited exploration, but we can be choosy. Ninety percent of our work is meant for Chinese audiences. So, how do you fit in?
This was a loaded question but an important one. We do hire entry-level foreigners so there are opportunities. Initial responsibilities lean heavily toward editing English language materials, but the goal is always to move on up to more involved and comprehensive work. But the issue I’m getting at is how you differentiate yourself from the other applicants, Chinese and foreign. Most of the foreigners I interview have spent time in China and have studied Chinese, so those aren’t differentiators anymore. Particularly interesting work experience (even internships) can be. Some of the things I’m always interested in are time spent working or interning in mainstream foreign media organizations (foreigners at my company generally manage relationships with foreign journalists); a really good understanding of social media and Internet (be prepared to talk literately about how technology is changing the news and PR industries); college radio or TV experience; an entrepreneurial streak; and a love of writing.
Writing in particular remains the most fundamental of PR skills even in the era of social media and word-of-mouth. If you can’t write well or don’t enjoy writing, then I seriously suggest considering another line of work. Furthermore, most junior foreigners at my agency start out as English language editors. Their job is to make sure that senior foreigners, like me, don’t have to spend too much of our scarce time copy editing. This means you need to have some writing and editing talent (the two aren’t quite the same thing). I’ll always ask for writing samples, and one of the things I look for is a sign that an applicant not only can write, but genuinely enjoys it. Keeping a blog, writing for student publications and writing as a hobby are the kinds of thing that I like to see.
Show you love to read, too
People who write well are almost always compulsive readers. I want to know that an applicant reads everything they can get their hands on. I mentioned books above. I also like to hear which blogs, websites, newspapers and magazines an applicant likes. Things that I keep an eye open for are Chinese or vertical industry interests. For instance, I handle technology clients, so I like an applicant that goes to a lot of tech news sites every day and has opinions about technology that are informed by reading. I’ll always dig into the responses a bit to get a sense of what drives an applicant’s tastes and how they discover interesting material.
One of the things I often ask foreign applicants is where they go for China news, which Western media organizations they think are best for Chinese news, how they think China is represented in Western media, and which journalists’ work they like. Only the most hardcore can discuss the latter question, but I like it because if you’re going to be working with foreign media you should have some sense of who they are and the framework they operate in.
I also like people who are clearly paying attention to the China blogs. If you’re already here and don’t know what Danwei or China Media Project is, you’re not trying hard enough. If you’ve read my blog too you’ll definitely get some brownie points (but that alone won’t get you a job). Look at the blogroll to the left, and start reading. Even if you can’t read them easily, I’ll be impressed if you know who’s influential in the China blogosphere, either in general or in the industry that you’re interested in.
Finally, if you can read Chinese and can have the same discussion about Chinese media and journalism, that will definitely help. Notice that it’s not the language skill itself, but how you’re applying it that’s important to me here. More on that below. But even if you can’t read Chinese comfortably, several good Chinese media organizations publish in English now and I’ll be much more impressed with an applicant that is paying attention to two or three of them than one that is not.
Chinese language is an advantage, not a guarantee
Back in 2004 when my (Chinese) boss hired me, I explained that my Chinese wasn’t very good. “Don’t worry,” she laughed. “I’m not hiring you for your Chinese skills. I’ve got plenty of Chinese people who can handle that.” And thank heavens for that, because my Chinese still isn’t great.
Don’t misunderstand me: Chinese skills are really useful and I much prefer a Chinese speaking (and reading) foreign applicant. But it’s only one factor among many. Abundant Chinese skills won’t make up for a lack of other qualifications or selling points. You can speak Chinese like Dashan, but if your English writing isn’t up to scratch I’m not going to hire you. As a foreigner, you’re never hired first and foremost for your Chinese skills. Like my boss, I have Chinese people on my team to handle the Chinese stuff. You’re there either to handle the English language stuff, or use your Chinese skills in support of English language stuff (for example, by being able to refer to a Chinese original document when editing a translation). Also, if you claim awesome Chinese I’ll have my Chinese team members interview you in Chinese to see how well your claim holds up (including asking you about any Chinese language stuff you may have cited in your “I love to read” proof points). Bear that in mind.
Work your contacts and get a recommendation or a referral
I got hired in China because I had several years of PR and Internet experience and a pretty deep knowledge of technology. I had also brought myself to Beijing for three months to do a language program, so I was able to do interviews in person. But, importantly, I also had an introduction from the guy who then ran the Singapore office of the company I joined in Beijing. I hadn’t worked for him, but he had interviewed me right before I left for my language program and was (inexplicably) impressed enough to make the connection.
I love it when I have candidates referred by people whose judgment I trust. Hiring involves risk. In China, where hiring foreigners comes with extra bureaucratic hassle, the risk is magnified. A candidate that doesn’t work out costs me time, money, effort and possibly client trust. I like to mitigate my hiring risk as much as possible, and recommendations are one way to do that.
If you want to work in PR in China, I strongly recommend doing an internship with an agency back home. Not only will you get some experience, but at best they’ll hook you up with their China office after you graduate. That won’t guarantee you a job, but it may very well help get you an interview. If nothing else, hopefully they’ll give you a good recommendation, and I value good recommendations from other people in the PR industry even if I don’t know them personally. If I think you’re worth hiring, however, I will make a phone call, so that person will need to be prepared to go into some detail about you.
Other places to check
There are two other things I’ll refer you to. One is a post by my good friend David Wolf (who was instrumental in my own hiring into my first job in China), “Some advice for the China-bound job seeker.”
Also, some months ago I did a long interview on the Blue Ocean Network during which I talked about things I look for in job applicants. If you’ve read down to here you’ll know most of it already, but it wouldn’t hurt to check it out.
Finally, some of you upon reading all of this may wonder, did he just give away the keys to the kingdom? Let me answer with a story. When I was in college in the late eighties I was a biology student. Like all bio students, I had to take organic chemistry. O-chem was the weeding class for science majors. You passed and went on to complete a hard science degree, or you washed out and went into the social sciences or whatever. O-chem exams were open book. “Hah!” I thought. “Open book! That’s easy!”
What a dumbass I was. O-chem is one of those subjects where “open book” is meaningless. You either know the material and the underlying concepts, or you choke, frantically flipping through your 800 page tome looking for the right formula while flop-sweat drips onto your test paper. Amazingly, I passed, but it was not an experience that I look back upon with warmth.
The kinds of things I’ve mentioned above are like that. You could memorize all the questions I’m going to ask in an interview and have answers ready in advance for all of them (which I would consider a sign of diligence and good preparation), but once you start talking I’ll know within sixty seconds whether it’s just a cram or the underlying passion, knowledge and understanding are really there.
I certainly welcome comments from people on both sides of this process, especially if they’ve had different experiences than me.
Good luck, and see you in China.
Note: Thanks to Gerald Schmidt for the copy edits. Like I said, writing and editing are different skills. Candidates take note: Another desirable quality is being able to take corrections with good grace.
Should Google have been in China? Did they make the right move in pulling out? Will this influence the Chinese government? What does it mean for foreign businesses in China? Are they evil or not? Who knows? Not me. And none of these questions are going to be answered in this post.
But stick with me, because that’s the point. The fact is that everyone and their goldfish has an opinion on Google’s fortunes in China, but few people actually know anything conclusive, so what we’re getting is a huge dose of punditry, analysis and opinioneering. This is the kind of thing that PR people live for, because what we’re witnessing first hand is the creation of a narrative. Or, rather, several narratives that serve different worldviews, audiences and points of view.
This is PR in action: The effort to influence perception and opinion with regard to an entity or event, generally with the objective of supporting some kind of end-state result (higher sales, a political victory, popular consensus, the launch of a war, etc.).
PR people are often accused of being liars. This is a shame, because a good PR person doesn’t lie or make up facts. I’d like to tell you this is because PR people are noble souls who want only the best for the planet and fuzzy puppies, but the real reason is that lying makes you vulnerable and doesn’t usually work very well (and, yes, it’s also wrong). Lies can often be proved false, and this can cause your position to unravel pretty quickly, often with devastating consequences. Even if you string the lie out long enough to achieve a stated objective, you’ll take damage on the backside if your story comes apart. See, for example, weapons of mass destruction and the Iraq war, which claimed the reputations and legacies of many people.
But PR people do often try to interpret the facts (or obscure them) in specific in selective ways. In the vernacular, we spin things. In fact, the very term “spin doctor” (sometimes credited to the novelist, Saul Bellow) refers to trying to define the interpretation of events or facts — to determine which way they “spin” in the public sphere.
PR people do this for a living. But we’re not the only ones who do it. Anyone with an agenda tries to interpret facts to create a narrative that serves that agenda, or that serves their world view. Often, dueling parties compete to establish the defining narrative of a situation or event. Consider how Democrats and Republicans competed to establish the narrative for health care reform in the interest of divergent political objectives. The media and public spheres of discussion are thus, often, noisy and squawky collections of competing narratives interpreted or distorted from the same basic set of facts in order to serve different agendas. Sometimes it takes a long time for a “definitive” narrative to emerge. Sometimes a definitive narrative never emerges, or different audiences arrive at divergent narratives because they’re exposed to different influences (anyone who looks at how Chinese and Western audiences fail to see eye-to-eye on many issues will be familiar with this).
This is essentially what has been happening with Google over the past few weeks, as people have competed to establish different narratives regarding its withdrawal from China. There has been a huge amount written and said about Google’s predicament and options in both the Chinese and Western media and blogospheres. At last count I had 27 articles bookmarked since the announcement that Google would shift it’s Chinese search operation to Hong Kong. And there were plenty that I didn’t bother to bookmark.
Well, that’s just too much damned stuff to analyze, and I am way too lazy to pore through it with a notebook and try to draw any meaningful conclusions about what it all means (hey, I don’t get paid for this). Also, my overwhelming impression is that there is so far roughly zero consensus on what it all means.
What I did do, however, was to put together a handy chart that shows the key known facts, and, based upon all the articles I’ve read, how each of the major interest groups that I observe is spinning or reacting to each of those facts. In each case, the vertical thread through the series of facts creates the skeleton of a narrative. And that’s what each of these parties –Google, its rivals, the Chinese government, the Western activist community– is trying to do: They’re each trying to control and define the narrative of Google’s situation in China to serve their own agendas. They are, in other words spinning. Here is what the result looks like:
I realize this is a vast oversimplification and there are no doubt various interests omitted, but this captures most of the main parties and facts. What’s not included here is any kind of conclusion of each narrative. In my opinion, the story is still unfolding and its too early for that. But we’ll see how things go over the next few weeks.
The other thing is that these narratives aren’t in equal competition. To use a possibly inappropriate military metaphor, there are different theaters of operation in which the stakeholder have varying levels of influence. So, in the US, Google and the activist (and analyst) community are the loudest voices. in China, the Chinese government has the tools to define the public narrative, and has been using them liberally, although there is some ferment in the margins (also here).
Eventually, there will be a canonical version of Google’s misadventures in China. or at least one canonical version in the West and one in China. These may not be the creation of a single group. One group might control interpretation of one element of the story, and one group control another. But for the moment, the fun is in watching the battle to own the story. Enjoy it while it lasts.
Finally, from a PR perspective, there is possibly one overarching lesson that can be drawn from this whole situation. I can’t take credit for this insight, it comes from Craig Adams, a colleague of mine. But it’s deceptively straightforward and I agree with it wholeheartedly. He said that if you have to sell out your basic principles to do business in China, that’s a pretty good sign you should reconsider your plans.
Other sources (just to prove I’ve done my homework):
Let’s say you’re a company selling some kind of product. Let’s say your product is –let’s just pick something at random here– laptop computers. Globally, this is a heavily commoditized category jammed with companies selling look-alike products with similar feature sets. In China, which has the usual big-time suspects plus a whole cloud of local also-rans, the situation is even more competitive. How do you stand out? How do you persuade students, young professionals and other consumers to buy your laptop, and not some brand-x laptop poseur laptop?
Well, in China the answer is often, “be cheapest!” But that’s not always the whole story. Often there is also some PR.
To that end, one thing you would often do is try to get your product into the hands of “influencers”, people who have the power to help lead public opinion in your target market, ideally in your favor. One way to approach this is the celebrity endorsement: I’ll send a cubic meter of 100RMB notes to your house if you wave my company’s product around, appear in some ads and show up at some of my events. And, hey, why not write a blog about it? This is generally legit and practiced everywhere. George Clooney and Omega watches, for instance, except he probably doesn’t get paid in RMB.
There is also the schwag approach, in which you give your product away to rich, famous and stylish types in the hope that they’ll be seen using it thus conferring glamor and sexiness upon it, hopefully without you having to write a colossal sponsorship check. This is why you hear about things like the absurd gift baskets at the Academy Awards. This also leads to the great commercial irony that rich people get more stuff for free than more deserving types, such as impoverished PR bloggers, and will no doubt be a contributing factor in the revolution when it finally comes.
There are, however, some generally accepted rules about the schwag game. Two of those rules, involving who it’s OK to target and how schwag can be paid for, can be summed up in a diagram that looks like this:
By participating in a program to give free laptop computers to 2000 delegates to the Chinese People’s Political Consultative Congress (CPPCC), Lenovo appears to have landed squarely in the lower-right, or what I like to call the “PR deathtrap” quadrant. The CPPCC is a political body that nominally advises on and suggests policy and which convened this week in Beijing as part of the annual political “two meetings” festivities. The other meeting is that of National People’s Congress, which has the slightly heavier responsibility of endorsing actual policy (a cynic might say, “rubber stamping”, although the NPC has pushed back from time to time).
As China’s annual National People’s Congress opened yesterday, many news headlines pounced on Premier Wen Jiabao’s remarks toward the end of his NPC report (see tab 11), in a section on anti-corruption, about the need for leaders to report their personal assets. But in the margins, commentators railed against shady practices nearer at hand — more than 2,000 laptop computers given away to delegates at the public’s expense.
The laptop story bubbled up out of China’s social media sphere back on March 2, when Chinese Internet users noted an odd mini blog entry from Zhang Xiaomei (张晓梅), a delegate to the Chinese People’s Political Consultative Conference who is also the publisher of Beauty Fashion magazine.
Zhang’s entries were succinct, mostly mundane summaries of preparations and speeches ahead of the two meetings.
CPPCC Chairman Tao says: being a national delegate to the CPPCC is a glorious mission, and a post for political participation and discussion. Sichuan party secretary Liu Qibao (刘奇葆) says: last year was the toughest year, this year is the most complex.
But in one entry she wrote: “When delegates report [to the meeting] they each get a laptop computer. What is different from last year is that this year these don’t need to be returned after we’re done with them. This is much more practical.”
Yeah, it sure is, isnt it? Keeping stuff often is.
As China Media Project explains, the response both online and in mainstream media has been pretty negative, with accusations of corruption and speculation about the amount of tax dollars spent on the computers. It has also been pointed out that Lenovo executives account for a large share of the IT industry representation at the CPPCC.
So here is where it gets interesting, and perhaps where Lenovo put a foot wrong assuming they played some role in creating this program and weren’t just lucky beneficiaries. CPPCC delegates occupy a strange space in between celebrity and politician. Many of the delegates, such as Ms. Zhang, are in fact celebrities or notables from the business world. Most are not politicians or officials in their daily lives. As the Financial Times noted this week, the entire CPPCC is a bit theatrical, and its actual contribution to the legislative process is debatable at best. In previous years delegates had been loaned computers, so why not let them hold onto them this year? A relatively small change in the grand scheme of things.
But regardless of what you think about the CPPCC or the actual power of its delegates, in the context of the “two meetings” the delegates are acting as politicians. In an era when Chinese people are increasingly sensitized to corruption and willing to discuss it online and hold officials to account, giving laptops to 2,000 wealthy people operating in a political role looks risky at best. Perhaps in some years it doesn’t become a big deal, but this year it rubbed people the wrong way. It probably would have been best to stick to the loaner approach, even at the risk of some slightly inconvenienced delegates.
From Imagethief’s point of view the good news is that this issue became, well, an issue. That it escalated online and in the media is a headache for Lenovo and perhaps an embarrassment for some of the delegates (although that may be optimistic), but it’s a good thing for accountability and for China. The CPPCC may be largely symbolic, but at least it could be relatively clean and symbolic.
So what should Lenovo do? This situation is a long way from being out of control, so what they probably will do is hunker down and wait for the government to decide that discussion of this issue is no longer appropriate and then enjoy the ensuing silence. A more progressive option would be to announce that in subsequent years they’ll return to a policy of loaning delegates computers rather than giving them away. Better yet would be to cancel the whole thing and make delegates self sufficient for computing in future. I’m sure most CPPCC delegates –even the ethnic minority delegates– can afford a computer.
Or how about this: It’s awkward to inform delegates that, sorry, contrary to what they were originally told they do have to return the machines. But Lenovo could ask delegates who don’t need the computers after the meetings to voluntarily return them, and then publicly donate the returned machines to some worthy cause. Rural schools? Barefoot doctors? Impoverished bloggers? You name it. Plenty of options.
Note: Some in-situ links removed from the paragraphs quoted from China Media Project. It’s worth visiting their original post.
Disclosure: I do not work on any laptop computer accounts, however my agency does represent a competitor to Lenovo. The views expressed here are my own.
Update: David Bandurski of China Media Project left a comment in the original version of this post noting that, as of writing, criticism in the media was not directed at Lenovo specifically. At least, not yet.
Sunday is shopping day in the Imagethief household, so this morning Mrs. Imagethief, Zachary and I bundled ourselves up and headed out to Wal-Mart.
Before you gasp in a fit of effete surprise, let me explain. As a card-carrying Bay Area intellectual snob, my pedigree is more Whole Foods than Wal-Mart, even if Whole Foods is basically just Wal Mart for Prius-driving gourmets (well, and my mom). But in my neighborhood in Beijing walking-distance supermarket options are limited to the eye-wateringly expensive import-barn in the basement of Shin Kong Place (RMB35 for four kiwi fruits? Sure!); the fast-declining Bonjour, in the basement of the equally fast-declining Sunshine 100 (like Carrefour without the lingering veneer of French-ness and, in winter, heated like hell’s supermarket); and the Wal-Mart at Wanda Plaza.
OK, we have a Jingkelong, too, but it’s not much use if your shopping needs extend beyond soft drinks, instant noodles and strawberry-flavored UHT milk. Once upon a time we had a Jenny Lou, but Jenny apparently decided our neighborhood was for losers and moved down to the accursed Jianwai Soho instead. So Wal-Mart it is. Plus, they deliver, which is essential when your shopping needs include kitty litter for two.
With Wal-Mart fresh in my head, and fresh kitty litter in my guest bathroom (for the cats, not for the guests, although there have been some parties…), I was therefore interested to see a Washington Post article covering in mostly positive terms Wal-Mart’s efforts to get its Chinese Suppliers to improve their environmental and labor standards (part of a special report called, “The Climate Agenda.”):
As a result [of Wal-Mart’s urging, Hong Kong-based soap and cosmetic manufacturer] Lutex has been paying attention to more efficient light bulbs, better ventilation and less packaging. It switched from Styrofoam to recycled paper and saved enough Styrofoam to cover four football fields. And Lutex, which has been here since 1991, says it treats four tons of wastewater that it used to dump into the municipal sewage line. That water was supposed to be treated by the city, but like three-quarters or more of China’s wastewater, it almost certainly wasn’t.
“We heard that in the future, to become a Wal-Mart supplier, you have to be an environmentally friendly company,” [CEO Benny] Fung said. “So we switched some of our products and the way we produced them.”
Wal-Mart has more than 10,000 suppliers in China. In addition, about a million farmers supply produce to the company’s 281 stores in China. If Wal-Mart were a sovereign nation, it would be China’s fifth- or sixth-largest export market. So the company hopes that small measures taken by all suppliers start to add up. Its 200 biggest suppliers in China have already trimmed 5 percent of their energy use.
***
In October 2008, Wal-Mart held a conference in Beijing for a thousand of its biggest suppliers to urge them to pay attention not only to price but also to “sustainability,” which has become a touchstone for many companies.
“For those who may still be on the sidelines, I want to be direct,” Wal-Mart chief executive Lee Scott said sternly. “Meeting social and environmental standards is not optional. I firmly believe that a company that cheats on overtime and on the age of its labor, that dumps its scraps and its chemicals in our rivers, that does not pay its taxes or honor its contracts will ultimately cheat on the quality of its products. And cheating on the quality of products is the same as cheating on customers. We will not tolerate that at Wal-Mart.”
Well, if he says so.
My first reaction to this story was, “What a PR score!” Cynical me wasn’t really prepared to consider if there might actually be something to this. But might there be real business motivations for moves that seem antithetical to a company with a mission to drive costs to the absolute lowest level?
One possible answer to that question can be found in a post at the well-known “Naked Capitalism” economics blog. Yves Smith suggests three factors that could motivate Wal-Mart to put real effort into pressuring its Chinese suppliers to improve. They are:
Creating an “insurance policy” against possible American trade restrictions that might be based upon setting minimum environmental and labor standards.
An effort to differentiate itself in the Chinese market by demonstrating attention to food quality standards and environmental issues.
A move to appease evangelical Christians who increasingly see earth-stewardship as part of their religious duty.
In fact, two out of those three things (see if you can spot which two) are still essentially public relations. Personally, I have a hard time believing the third is anything close to being a sufficient motivation for a serious revamp of Wal-Mart’s Chinese supplier relationships, but, then, I live a long way from the American heartland and am thus not well attuned to its priorities.
The second point seems plausible, but as a regular Wal-Mart China shopper I can attest that Chinese shoppers seem perfectly enthusiastic about Wal-Mart already. Wal-Mart also does a brisk trade in allegedly organic Chinese produce (we buy it, but I’m really not sure how far to trust the “organic” claims). At any rate, as an approach it sure couldn’t hurt, unless it starts leading to significant job losses at Wal-Mart suppliers in China, in which case, all bets are off.
Ultimately, although the impact is in China, I still see this as primarily a move to influence the customers and activists back home in the US who have the greatest ability to influence Wal-Mart’s business. China environmental and labor issues are important in China, of course, but arguably not as important as they are in the US. (Next up for trouble: Apple? Don’t miss the bizarre fanboy comments.)
As for me, I’ll take a pass on the live soft-shelled turtles (where are the PETA people?), but the produce section isn’t bad and you can’t beat a fuzzy car-seat cover that carries the inscription, “Space cat who dreams of happiness!” If only I had a car.
Imagethief stumbled blearily to his computer this morning expecting a relaxed scan of the news but found the Chinese Twittersphere ablaze with the news of Google’s bombshell blog post, which went up in the middle of the night early this morning our time. Titled “A new approach to China”, the post, by Google’s Senior Vice President for Corporate Development and Chief Legal Officer, David Drummond, was essentially a public threat to withdraw from China. As such, it was as direct a challenge to the Chinese authorities as I have ever seen in a piece of public corporate communication.
The first half of the post discusses alleged hacking attempts on Google, apparently with the aims of both recovering Google source code and accessing the Gmail accounts of dissidents. But the second half of the post is more interesting. The money grafs below (emphasis mine):
We launched Google.cn in January 2006 in the belief that the benefits of increased access to information for people in China and a more open Internet outweighed our discomfort in agreeing to censor some results. At the time we made clear that “we will carefully monitor conditions in China, including new laws and other restrictions on our services. If we determine that we are unable to achieve the objectives outlined we will not hesitate to reconsider our approach to China.”
These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.
No doubt a great deal has transpired behind the scenes in the lead up to this announcement. To save time, here’s what I don’t know:
Whether this is linked to rumors of Google’s possible withdrawal from China and staff exodus that circulated several weeks ago.
The relative weights of the hacking issue, censorship issue and Google’s business struggles in China in leading the company to make this statement.
What, if any, discussions Google had with Chinese authorities prior to making this statement (they speak of discussions “over the next few weeks”), or whether there are actually continuing negotiations.
Whether recent blocks of Google Docs and Google Groups in China contributed to this decision.
Whether Google would have done this if their business in China was stronger. China contributes a minuscule portion of Google’s revenue.
What will actually happen to Google’s business in China in the long run.
Here is what I do know:
Google has taken the China corporate communications playbook, wrapped it in oily rags, doused it in gasoline and dropped a lit match on it. In China, foreign companies tend to be deferential to the authorities to the point of obsequiousness, in a way that you would almost certainly never encounter in the United States or Europe. Scan any foreign company’s China press releases and count the number of times you see the phrase, “commitment to China”. Demonstrating “alignment with the Chinese government’s agenda” is an accepted tenet of corporate positioning and corporate social responsibility work in China. This is testament to the degree of direct power that the Chinese authorities wield over the fortunes of foreign businesses in China. Even when foreign companies are in dispute with the Chinese government they tend to offer criticism obliquely as long as they have a business stake or operations in the country. Note, for example, the scrupulous diplomacy of Rio Tinto’s communications concerning the detention of its employees last summer, a far more serious situation than anything Google has encountered (although also with far more money at stake).
In this situation Google has undertaken a bet-the-farm confrontational communications approach in China. They will not have made this decision lightly. Dressed up in the polite language above is what is essentially an ultimatum: Allow us to present uncensored search results to our Chinese users or we’ll walk. The Chinese government is not likely to cave to an ultimatum from a foreign company, no matter how decorously delivered. As Richard Waters of the FThas pointed out, the language does leave some wiggle room for further negotiation. However, Imagethief cannot imagine a circumstance in which the Chinese government will give Google free reign, especially in the current, highly restrictive climate for Internet services. Barring some surprising developments, the clock would therefore appear to be ticking for Google.cn, if not Google’s overall operations in China. It will be very interesting to see how this plays out.
Would Google continue with an office in China if there was no Google.cn site? They could still conduct R&D here, for instance. But Google’s R&D operations in China have been troubled (remember the Sogou IME scandal?) and if the security issues are taken at face value continuing operations here in the absence of a local business to support might simply be extra risk. Consider how many China R&D operations are “PR&D”, designed to demonstrate that essential “commitment to China” in support of a revenue-generating business in China. It’s not that real R&D doesn’t happen here, but how many companies do high-level, primary R&D in China in the absence of an on-shore business and supporting government relations program? And could Google attract talent to a pariah operation? Distraught Chinese netizens are already laying flowers at Google’s China headquarters.
The Wall Street Journal’s story (sub) on the unfolding situation makes some interesting points (emphasis again mine):
The common assumption, however, is that no matter how onerous the limitations and challenges faced by foreign companies in China, the market is too big and important to walk away from.
That calculation has forced a number of foreign firms to accept conditions in China that they might not tolerate elsewhere. The country has 338 million Internet users as of June, more than any other country.
Google would be the most high-profile Western company in recent years to draw a line under the kind of compromises it is prepared to make and walk away from China.
It would be an extremely rare case of a foreign company taking a stand on human rights, and placing that issue over commercial considerations. A number of foreign companies exited China after the Chinese army crushed student protesters around Tiananmen Square in 1989. But they mostly came back in the following years.
A Google withdrawal would also be an implicit rejection of the argument made by many technology companies that their presence in China overall helps expand access to information for Chinese citizens, despite censorship.
That’s the very last line in the story, but I found it one of the most interesting. If you followed the original justifications offered by many American Internet companies for launching businesses in China, or the congressional hearings on the matter in 2006, you will recall that the argument that even a censored presence in China improved access to information for Chinese Internet users was central. If Google repudiates that argument it will put pressure on other American Internet firms currently toeing the regulatory line in China, especially Microsoft, and weaken one of their core public arguments for a continued presence in China. Then again, it may also represent an opportunity for them. After all, “Google” doesn’t phoneticize well in Chinese, as the flap over the “谷歌” branddemonstrated. But “Bing” works quite nicely indeed.
This only the latest chapter –albeit potentially a critical one– in the very interesting story of Google in China. Someone needs to write the book. Anyone want to step forward for that?
CNBC interview with David Drummond (Video – also embedded below): “We’re not saying one way or the other whether the attacks were state sponsored…” Note also the silly use of the word, “cyberterrorists” by the interviewer.
Brief, relatively straightforward report from the People’s Daily online (Chinese).
Chinese telecoms analyst Xiang Ligang calls it “psychological warfare”, doesn’t think Google will pull the trigger, and doesn’t think it will be a cataclysm if they do (if I read it correctly – Chinese).
“In a world in which we are so used to public relations massaging of messages, this stands out as a direct declaration. It’s amazing,” said Jonathan Zittrain, professor of Internet law at Harvard Law School and co-director of Harvard’s Berkman Center for Internet & Society.
The fallout will be interesting. I can’t recall a single case of a major international company with operations in China taking a stand like this. As someone who agreed with Google’s reasoning when it entered China, I also support this move. If it cannot operate here in accordance with its global standards, it should leave. I have given up on getting my own website unblocked by the government and am resigned to the fact that it’s only accessible to people who are outside China or know the technical tricks to get over the Great Firewall.
I’d rather be outside the wall and free than inside it with the icy hand of the censor around my throat.
Full disclosure: Imagethief is a supporter of foreign Internet services operating in China. Elaboration in this comment, below, in response to a point from a reader.
Xinhua English report on the statement: “‘It is still hard to say whether Google will quit China or not. Nobody knows,’ the official said.”
Gady Epstein’s column on Forbes.com: “Dreams of Internet openness in China appear to be a fantasy.” Indeed.
Evgeny Morozov punctures the feelgood balloon at Foreign Policy: “If…you believe that [Google] did the right thing in China by offering their limited service (rather than no service at all), I don’t see how this move could make you feel good…”
Alright, I confess I made up the “heinous fabrications” bit. But the “sheer lies” sound bite comes straight from China’s Ministry of Foreign Affairs, which has clearly worked hard to make sure that its representatives around the world are working from the same talking points.
China has found itself accused of a lot of hacking recently. A March 28 New York Timesarticle covered the dreaded “GhostNet”; innocent computers ruthlessly compelled to do the bidding of alleged shadowy overlords in Beijing (which bidding was, apparently, to screw with Tibetan exile organizations). More recently, a story in the Wall Street Journalreported on attempts to hack into the systems controlling America’s power grid, some of which apparently originated from China and Russia.
The Chinese government had chances to rebut both stories. Here is a Beijing-based Ministry of Foreign Affairs spokesman responding to a “GhostNet” question in a regular media Q&A the day after John Markoff’s story broke in the Times:
“I have noted before that the Chinese Government has always taken cyber-safety very seriously. We resolutely oppose any crime including hacking that destroys the internet or computer network, which is stipulated in relevant Chinese laws and regulations. The current problem is, some people overseas are indulged in fabricating the sheer lies of the so-called cyber-spies in China. What I have seen is a ghost of “Cold War” and a virus of “the China Threat” mentality. The China Threat virus on those haunted by the Cold War ghost strikes from time to time. Their attempt to defame China will get nowhere.”
And here is Chinese Embassy spokesman in Washington DC responding to the electric grid issue in the Journal (responding in writing, I would guess):
[The Chinese government] “resolutely oppose[s] any crime, including hacking, that destroys the Internet or computer network” and has laws barring the practice. China was ready to cooperate with other countries to counter such attacks, he said, and added that “some people overseas with Cold War mentality are indulged in fabricating the sheer lies of the so-called cyberspies in China.”
Well, that’s message discipline for you. And it would be admirable discipline indeed, were the talking points not the usual throwback language that always sounds better coming off of a red-ink woodcut with a picture of Mao in a sunburst than off of the pages of, say, theWall Street Journal. The only thing reminiscent of the Cold War here are those quotes.
Of course the Chinese government, like all governments with access to electricity, is probably involved in computer-espionage and computer-warfare programs. But it obviously has to deny any involvement in polite company. That’s a given, and no-one can blame them. There are even some good bits and pieces in both responses above: “Always taken cyber-safety very seriously”, “oppose [activities] that destroy the Internet”, and “ready to cooperate with other countries”. Unfortunately, the usual, overly scandalized language wrapped around those bits and pieces does nothing to help. It makes the spokespeople sound, to abuse Shakespeare’s Queen Gertrude, like they are protesting too much. The good stuff gets lost.
If I was rewriting their talking points, I would take a classic broadening approach where you turn the accusation everyone’s problem. You can see the beginnings of this in the embassy spokesman’s quote. I might suggest something like this, which takes the good bits from both responses and loses the righteous anger:
“The Chinese government takes Internet security very seriously, and is opposed to any activities, including hacking, that make the Internet less secure or less useful. Internet security is a concern for everyone who uses a computer. As you know, internet use has been growing rapidly in China. This year we passed 300 million users, and now have more people online than any other country. The Internet has been a great contributor to growth and innovation in China, so no one takes these issues more seriously than we do.”
If you wanted to be extra-saucy, you could build a bit on the embassy spokesman’s cooperation statement and say,
“We stand ready to cooperate with the governments of other Internet using nations to find ways to improve global Internet security for all users.”
Less quotable, perhaps (short of a threat to kill the questioner’s pets, what wouldn’t be?), but also much less of that how dare you? tone that comes off so defensively. As we say in PR, you can’t control the questions you get asked, but you can always control the answer you give. Why not take the opportunity to say something positive instead of just reeling off an angry denunciation of the charges?
And if you read the responses above carefully, denunciations is what they are. There is no outright denial in either of them. I doubt that’s a legal maneuver (after all, what are you going to do, sue them?) so much as a chosen rhetorical technique: Attack the credibility of the charge rather than denying it. If so, it’s shrewd on a certain level. Denials always look terrible in print. “I never stole those panties!” has “cover pull quote” written all over it. That’s why we always tell spokespeople not to “repeat the negative” in a question. But there are many things that could better replace an outright denial than straw men fabricating sheer lies.
Honestly, I am much more worried about random errors and undirected worms in the computers running our infrastructure than I am about the Chinese military. I am much more worried about criminal hackers than I am about government hackers.
Nart Villeneuve of the Internet Censorship Explorer on the hype-factor in the article.
Like on the top-forty radio show Imagethief used to listen to as a thirteen-year old, the hits keep coming in the Sanlu milk powder crisis. Over the past thirty-six hours the situation has evolved from a company-specific Sanlu crisis to a nationwide dairy-industry crisis reminiscent of the glory days of last summer’s product quality crisis.
Here is the latest: Products from 175 dairy companies have been tested (中). Twenty-two of them tested positive. Sanlu is still the champ in terms of micrograms per kilo of product, but some other famous (and not-so-famous) brands are now implicated, including Mengniu and Yili. I bet Yang Liwei didn’t know about this when he decided to endorse Mengniu. But astronauts should be able to digest melamine, which anyway seems like kind of a futuristic substance. Imagethief used to have melamine coasters. No joke. Very “Jetsons”.
Also not a joke is that over 6000 children are now reported to have been affected and three are dead. The Internet is seething. Collars at the State Food and Drug Administration haven’t felt this tight since Zheng Xiaoyu was frogmarched away and shot for corruptionjust over a year ago.
So here are the PR implications:
Winner: Sanlu (sort of)
For Sanlu this is actually good news. All of a sudden what looked like their problem is a nationwide problem in which they are just one of many companies caught in the riptide. In PR we teach an interview technique called broadening. When confronted by an interviewer with a problem or challenge that cannot be refuted you respond by “broadening” the issue to include the rest of the industry, your rivals or whomever. It works like this:
Maria Bartiromo: Your stock price is down by 50% this month? Does your company suck?
You: Well, Maria, market conditions are tough and many companies in our industry have had similar declines but we are key message, key message, key message, yadda yadda yadda.
Sanlu doesn’t need to broaden the issue. It has broadened itself. This doesn’t make Sanlu’s problem go away. They’re still the worst affected, the most apparently negligent and most closely associated with the issue. In the past day or so, the chicken of accountability (a really big chicken in this case) has come home to roost and heads have justly started rolling. But misery loves company, especially in PR, and now the spotlight of attention has spread out a bit. It buys Sanlu some small breathing space at the trade-off of kindling a hotter but more diffuse groundswell of national anger.
Losers: Everyone else
While this broadening might be good news for Sanlu, it’s bad news for everyone else. Consumers have no idea which domestic manufacturers they can trust. Even ice cream bars (sob!) look suspect. Foreign manufacturers such as Nestle may benefit for a while, assuming resentment doesn’t turn on them later, which is possible. Also, Fonterra is now recalling its own Anmum branded milk in China. On top of its involvement in Sanlu, this may be wearing the foreign gloss a touch thin.
The Chinese dairy industry looks like a hopeless swamp incapable of quality control. Production and upstream wholesaling are completely fragmented and obviously subject to only the most featherlight of regulatory scrutiny or inspection regimes. The job of applying quality control nominally lies with the brands that sit between green fields and cow dung and supermarkets aisles and consumers, but they appear to have dropped the ball completely. Honestly: Twenty-two companies and 66 products? You’d sooner trust the Three Stooges with your dairy factory than this bunch of clowns.
The SFDA looks about as wired as it did in July, 2007. AQSIQ, which is separate from SFDA, is also scrambling. Regulatory involvement seems conspicuously after-the-fact in this situation. Sanlu was exempted from inspection because it was recognized to be such a fabulously well-run company. Lesson: No one should be exempted from inspection. More inspections for everyone, in fact, seems like part of the prescription for this situation.
And China in general reminds everyone else in the world of why they are just a touch suspicious of Chinese food products. There are apparently some export products involved in the current situation, although they are apparently exported primarily to the kind of no-hope client-states (think Myanmar) that are unlikely to make too many waves lest they have to start paving their own roads. But the rest of the world is watching.
As, incidentally, are the (ahem) China-based expatriate parents of small children. I am happier than ever that Imagethief Jr. is breast-fed. Mrs. Imagethief may be made of stern stuff, but it’s almost certainly not melamine.
Now what?
Aside from the fact that Imagethief will sadly never look at an Yili ice cream bar the same way again, what happens now?
Unfortunately, the whole situation has got much trickier. For individual companies PR issues can be managed because it is relatively easy to speak with a single voice. Situations that involve entire industries are trickier, because getting a bunch of competing companies to speak with a single voice about anything is like herding giant cats with tens of thousands of employees each. Cats that often want to blame each other. Try doing PR for an industry association someday and you’ll get a taste of this.
The cat-wrangling hat now passes to the Chinese government, which has just inherited the stage from Sanlu. The Chinese government needs to explain why there is a pervasive problem in the dairy industry and what it is doing to solve the situation. (It would be nice to talk about a plan for structural changes in the industry.) It needs to make sure that the dairy brands themselves are singing the same song with one voice arranged to church-choir perfection. It also needs to keep on letting consumers know which products are safe and which aren’t and ensure that people have enough real and timely information that gossip and suspicion don’t become the main drivers of the public response. It needs to vigorously punish offenders who have been sloppy and do its best to convince people that the companies, regulators and local governments are all entwined in one sloppy, corrupt ball. I know that executions will look tempting, but executions alone probably won’t solve the problem of restoring consumer confidence, so let’s think more creatively than that.
Importantly, if there are more melamine skeletons in the closet it is best that they come out soon rather than creep out over the coming weeks and months. The situation has already deteriorated. The sooner it moves into recovery phase the better. More bad news dribbling out over weeks and months will delay the start of the recovery and stoke the fires of suspicion and anger. This is one reason why it’s important to make sure people have enough real information to forestall the worst of the gossip and conspiracy theorizing. For that reason, AQSIQ’s public round of testing was a good thing, even if the news was bad.
But the whole process will be difficult. In yesterday’s post I mentioned all the entrenched and institutional problems that retard the development of public communication in China. Many of them also serve to slow the development of effective commercial enforcement. In a sense the larger challenge for China is not just to prove that it can clean up the dairy industry, but to prove that its commercial environment can evolve into something other than a cozy swamp where insiders get rich and outsiders get kidney stones.
But that’s been the challenge for a long time now.
Suppressing the news is not a PR solution Hop on over to ChinaSmack and read the new post “Kidney Stone Gate: Baidu denies censoring search results“, which cites a 21st Century Business Herald report on Baidu’s possible involvement in suppressing negative search results for Sanlu:
Soon after the Sanlu poisonous milk powder news came out, a copy of letter from the Teller public relations firm to the Sanlu Group began spreading on the internet. In the letter, Teller advised Sanlu to pay Baidu 3 million RMB to have Baidu manage search results containing negative news about Sanlu (supposedly not all news could be censored but most results coming from smaller websites could be deleted). When Baidu heard the rumors, they quickly denied working with Sanlu. A representative from Teller also said the letter was fake.
Sanlu Group logo: Sanlu is suspected of paying Baidu 3 million RMB to censor negative search results.On September 13th, “21st Century Economic Report” reported that Baidu admitted receiving a “Sanlu Public Relations Crisis Proposal” letter from a public relations firm, but Baidu could not confirm that it was the Teller firm.
There’s more in the post, including a partial translation of the 21st Century Business Herald article. Some evidence is presented in the story to support the allegation that Baidu was complicit, although Baidu denies it. The jury is still out.
However, the basic PR rule is this: Supressing bad news is almost never a viable PR solution. Bad news tends to leak. It tends to percolate through the pores. It tends to squirt around to wherever your grip is weakest, like the air inside a balloon animal. This is particularly true in the era of the Internet, regardless of what Baidu (or even the government) does.
Only an irresponsible PR agency proposes suppressing bad news as the core of a PR strategy. That’s not rebuilding or defending a reputation. That’s admitting you can’t help. But suppressing news is an old tradition here, handed down from the highest levels. It will be a long time before that kind of recommendation stops coming.
Baidu’s statement (中), also partially translated, includes the following:
Baidu’s most important value is to seek truth from facts. (百度价值观中最重要的一条就是实事求是)
One would hope so. But I recall that somebody else in Chinese history used to talk emptily about seeking truth from facts.
If you want to get people mad –I mean fired-up, torch-and-pitchfork enraged– screw with their pets or their babies. That’s what we’ve learned over the past year thanks to the unfortunate tendency of the plastic melamine to pop up in the strangest places, most recently in infant formula from Sanlu, a mighty Chinese dairy firm.
You would think that after last year’s long-running product quality fiasco people would have learned. Those of you who have brushed the last of the Olympic rings from your eyes will recall that the product quality crisis began with American pet food tainted with melamine thanks to contaminated ingredients from China. It then rippled into lead-tainted toys (repeatedly), antibiotic-laden fish and various other hysterias that collectively managed to knock Dream for Darfur (remember them?) off the front pages. Man, what a summer that was, especially for PR nerds. I get all misty just thinking back on it.
But there will be time for nostalgia later. I want to spend a moment on the word “crisis”, which I used in both the headline and the paragraph above. Like the phrase “mission critical”, beloved of jargon-head business types, “crisis” is a word that is often misused to describe any situation where a company is wrestling with a spot of PR trouble. Chinese nationalist youth are insulting our company on the Internet! We’ve got a crisis! No you don’t. You have an “issue.”
What’s the difference? An easy if somewhat oversimplified way to think of this is chronic and debilitating vs. acute and life threatening. Being morbidly obese with high blood-pressure and diabetes is an issue. But your doctor can prescribe a program that will over time mitigate it. Going into cardiac arrest is a crisis in which the options are immediate treatment or death. In corporate terms this means a situation so bad it threatens the reputation of the company in a way that could rapidly and substantially damage business or shareholder value. Crisis is life-and-limb, billions-of-dollars or fate-of-the-company territory. Cyanide in Tylenol, the Exxon Valdez, Singapore Airlines flight 006; those are crises. Lehman Brothers is was having a crisis (it is now over in the same way that the cardiac-arrest crisis will be over if you don’t get immediate treatment).
Apply the “life-and-limb” test and I think we can agree that Sanlu is having a crisis. Fonterra, their foreign part-owner to the tune of a significant 43%, is having an issue, although it could get worse. More on that below.
Here is the story so far. On September 11th, almost a week ago, initial reports emerged that an unusual outbreak of kidney stones in about sixty infants had been linked to tainted milk power. Naturally the first assumption was counterfeit product, as happened in the tragic Anhui milk powder episode of 2004 and in countless food scandals in China. Since then the story has spread, blob like, in a fashion that reeks heavily of a coverup unravelling. There are now over 1000 affected babies and two fatalities. Genuine Sanlu product has been revealed to be the culprit. There’ll be no palming it off on counterfeiters. A recall of over 8000 tons of product is under way. Sanlu apologized in a news conference yesterday. Heads are rolling, but only at a suitably low and distant level in the great chain of scamming and incompetence.
Deliciously (unless you’re a formula-fed baby), Sanlu and provincial authorities from Hebei, where Sanlu is based, allegedly knew about the problem possibly as far back as early this year, and at the very least in early August, well before the Olympics. We know this because Fonterra execs are now telling anyone who will listen that they told Sanlu and the Hebei authorities that there was a problem but got no action until they got the New Zealand government to tell the Chinese central government. So everyone involved knew the formula was dodgy except for parents merrily feeding it to their babies. The irony of this situation is that foreign involvement is often seen as an indicator of quality thanks to the well documented quality problems of domestic brands.
The New York Timeshas this quote from Gao Qiang, Vice-Minister of Health, which is solid gold by the leadenly unquotable standards of Chinese officials:
“This is a severe food safety accident.”
You think?
Now the conspiracy theories are boiling to the surface like worms after summer rain (we’ve had a lot of rain in Beijing recently, so this image is fresh in my head).
Some think leading Chinese search engine Baidu may have had an agreement with Sanlu to filter negative search results. I don’t really buy this one, but as a student of the Internet I find the supposition interesting. It says a lot about how people feel about the power of search engines as gateways for information. If it was true it would be really interesting. Note to search engines: The time to come clean about how you will and won’t help advertisers is now.
Others wonder if the story was suppressed because of the Olympics, and invoke the Central Propaganda Bureau’s alleged 21-point reporting guidance for the Olympic period. I find this one pretty credible, and it stokes my belief that in addition to bringing out some of the best about China the games also brought out some of the worst. The post linked to above, from China Digital Times, also has a translation of apparent Propaganda Bureau guidance on how to report the current situation, suggesting that the cogs of harmonization are already grinding through comment on this situation even if they’ve not yet clamped down on it completely.
And then there are claims that Sanlu not only knew about the issue but has also beenpaying off afflicted consumers to buy their silence. This one is also pretty credible, and goes along with established Chinese practice of privately arranged compensation for the families of people injured in industrial accidents and such, often in return for an agreement not to make waves. Coal mines are past masters of this tactic.
Uncoverup The PR rules for situations involving the endangerment of human life are simple: The company’s priority is to take all steps possible to mitigate danger, and communication should be centered around ensuring that the public is completely and rapidly informed in a way that minimizes the risk of injury or death. If you concede that the contaminated product is fait accompli and that some damage control will be necessary, then such an approach, funnily enough, often pays the best dividends in terms of repairing a damaged reputation. This is because it demonstrates clearly that the company prioritizes customers and human welfare over a grimy buck. In troubled times this a critical message to send, and it helps to remind customers of why they placed their trust in the company in the first place. See the Tylenol-cyanide crisis for the textbook example.
On this count, everybody involved in the current situation fails. They’ve prevaricated their way into disrepute. There were some shockingly basic steps ignored along the way. As of Sunday, for instance, when the formula recall was in full swing, there was nothing on Sanlu’s website to suggest anything odd was going on. No announcement. No recall information. No advisory to customers. Not hotline. No news since August 14th. Zilch. As of yesterday and into today their website has been unreachable.
This is not a surprise. It is perhaps unfair to judge Sanlu by my imperialist western standards of public communication given that the company is the product of an environment in which the relevant authorities have not always led by example. Sweeping scandal under the rug is a favorite institutional pastime here. Read up on SARS if you need a refresher on this, or the Songhua river benzene crisis, or the Xifeng county journalist scandal, and so on. But SARS was blown wide open, and if this was a cover-up it is now blown wide open too.
While acting vigorously in the interests of the public helps to repair reputational damage from a tainted or defective product and rebuild trust, covering it up compounds the problem. Remember when you broke the dining room window and then lied to your mom and said it was the dog? And she didn’t mind the window so much but was gravely disappointed about the lie? And you didn’t even have a dog? You learned an important lesson then (I hope). This is the same thing, only bigger and with the public instead of your mother. And no imaginary dog.
A blown cover-up demonstrates convincingly to the public that you don’t give a crap about them and that you were willing to let them (and their babies) twist in the wind to save your own hide. Now you have two problems instead of one: Your product is poisonous and your company is run by untrustworthy bastards as far as the public is concerned. The natural conclusion is that you now have at least twice as much work to do to repair your reputation, although Imagethief thinks that the repair work actually goes up as the square of the number of self-inflicted wounds, if not the cube (modern media being three-dimensional).
In addition to simply being ethical, coming clean is a good approach because it shortens the time-frame for bad news. Scandals often don’t bust all at once, but drag out over days or sometimes weeks as bad news bubbles to surface in bits and pieces. This can feel a like a very long time when you’re on the pointy end of bad press and public scorn, and can leave a very deep impression on the public. As noted above, the CEO of Sanlu has apologized, but once the story has gone this far it looks like an apology under duress. That simply doesn’t have the power of pre-emptive contrition. (Lawyers take note: I am not suggesting pre-emptively admitting liability.)
While it’s hard by definition to know how many cover-ups succeed, Imagethief expects that most are busted, especially when there is a large public impact. The old mob aphorism holds that two people can keep a secret if one of them is dead. If a lot of people know about your crisis, better for you that you resist the coverup temptation. Own-up and be seen to get cracking on solving the problem and helping the victims. Or hope that your crisis is so thermonuclear that it wipes out all witnesses and all evidence.
But exhorting transparency is almost certainly pissing into the wind. The problem here isn’t just one of the occasional irresponsible company. And it’s not a problem that one or two or a dozen PR agencies or crazy PR bloggers are going to solve. It’s a problem of endemic business and regulatory culture. There are several factors at work. First, the Chinese government doesn’t have a history of encouraging transparency. Second, the relationship between media and business is often too cozy for the good of anyone but media and business (this is especially true at the local level, which is why the government’s restrictions on all but national news organizations reporting outside of their home areas are so damaging). Third, the government still maintains explicit control over the media and to a degree the Internet, which means that stifling coverage by fiat consistently presents itself as a path of least resistance. Fourth, the government still maintains tight links with major businesses. Sanlu’s majority owner as near as I can determine is the Hebei provincial government, who’s PR philosophy is probably pretty old-school.
The Kiwi’s aren’t off the hook either
But what of Fonterra? They’re not a Chinese company. They come from a different media, PR and regulatory tradition. How has their performance been? From the Financial Times:
The Sanlu board, which has three Fonterra directors, was told of contamination on August 2 when a trade recall began, said Andrew Ferrier, Fonterra’s chief executive,yesterday. A public recall did not start until nearly six weeks later.
“[Fonterra] have been trying for weeks to get an official recall and the local authorities in China would not do it,” Helen Clark, New Zealand’s prime minister, said on television yesterday. “At a local level . . . I think the first inclination was to try and put a towel over it and deal with it without an official recall.”
***
Sanlu could not be reached for comment yesterday, but Mr Ferrier defended Fonterra’s role, saying “as a minority shareholder [the company] had to continue to push Sanlu. Sanlu had to work with their own government to follow the procedures that they were given.”
Not so good, I’d say.
Here’s the million-RMB question: Did Fonterra have a responsibility to go public in China based on what they knew? To someone not directly involved (such as me) it looks an awful lot like Fonterra sat on its hands despite knowing that customers were at risk, possibly to protect its business and relationships in China. Minority shareholder they may be, but 43% is a big minority and they have three board seats. Their reputation is hostage to the behavior of their partners and right now they look complicit in a sketchy situation.
I am sure it was hard decision considering the prickliness of Chinese authorities and regulators and the likely fallout of ratting on their Chinese partners (see Danone vs. Wahaha for an example of what can happen when sino-foreign business relationships disintegrate). But I wonder how their noisy stakeholders back home in New Zealand, who won’t care so much about the idiosyncrasies of the China market, will react. Several nasty questions present themselves. How bad would the problem have to be before Fonterra blew the whistle? Do they prioritize their China business over the safety of customers? Is China an appropriate market for them to be in under the circumstances? At times like this you’re happy to be a privately held cooperative.
Fonterra has no official statement on the situation that I can find as yet, although I’ve seen references to press releases. Private or not, I think they have some explaining to do.
Lessons from the great milk-powder fiasco of ’08
It has been heartening to see both the Chinese press and the Internet go to town on Sanlu, especially since they’re not my client. While I don’t envy them their PR miseries, the willingness of the Chinese press to take on big Chinese companies that do wrong by their customers is an important development for civil society. While the coverage will follow the Central Propaganda Department guidelines referred to above, the whack of big, negative headlines may still have a salutory effect on other companies. That’s as it should be. People trust brands. The tradeoff is that brands are accountable and the media is an important part of the mechanism for making them so.
It’s also interesting to see that even Chinese companies can have quality problems with their suppliers. At the height of the product quality crisis much was written about the importance for foreign companies of vetting and monitoring suppliers rigorously and continuously. It is reassuring in some small way to see that it’s not just foreign dupes who have trouble managing these problems. Local dupes can have them too. It is, on the other hand, a reminder of how much room for development there is in the Chinese commercial environment.
Finally, as bad as this situation is, it shows that there is an opportunity. Chinese companies do understand the value of a powerful brand and a good reputation. That’s a good first step, but more is needed. Many clearly also learn the value of communicating transparently and aggressively in crisis situations in order to defend the brand and reputation. Nobody wants a crisis, but the lessons learned this way can help prepare the best managed and most progressive of China’s big consumer goods companies to succeed internationally, where the old cozy approach won’t work as well.
An ancient and time-worn chestnut of China journalism is that the word for “crisis”–危机, or weiji–contains the characters for “danger” and “opportunity”, which is sorta-true-but-not-really. As a piece of popular wisdom, it has the unfortunate consequence of trivializing the concept of a crisis. Sure, “crisis” in the classic sense means an inflection point from which multiple outcomes, including perhaps opportunity, may arise. But in the colloquial PR sense it means a grave situation with unpleasant and possibly catastrophic consequences. Thus, Imagethief has always felt that it would be much more accurate if the Chinese word for crisis combined the characters for “shit” and “fan”. I’m sure that right about now executives from both Sanlu and Fonterra would agree.
Still, I’m an optimist by nature, and I do like to look for the upside. Let’s hope some lessons are learned.
A very interesting story from Peter Ford of the Christian Science Monitor on the systemic problems in China that have made situations like this so depressingly regular.H/T China Law Blog:
Some observers see a silver lining in the scandal. “One positive result is that people will become more aware of food safety,” says Ren Fazheng, a professor at China Agriculture University in Beijing. “Government and society will pay more attention to this issue … and more inspection agencies will use more methods, so the level of inspection will improve.”
Yet public opinion, even outrage, has limited impact, as evidenced by the stunted efforts by angry parents who lost children in the Sichuan earthquake in May to demand government accountability. While officials are still investigating why so many schools in the quake area collapsed, protests have been curtailed and media coverage on the issue banned.
Still, with Sanlu closed by government decree and its future in doubt, two men charged with crimes that can carry the death penalty, and a government investigation widening, “this serves as an extremely strong cautionary tale for the whole industry,” says Professor Yang.
“Lawsuits have not worked well in China, but the costs are escalating” for companies that cheat, he argues. “Producers realize now how precious their brand name is.”
Perhaps. But as long as some companies feel their brands can be protected through means other than sound ethics and transparency I’d suggest channelling the Gipper: Trust but verify.
Disclosures:
Imagethief once worked for Fonterra’s PR firm in Singapore. Fonterra was not my client.
The founder of Imagethief’s current employer advised Tylenol during their 1982 crisis. Imagethief was 15 at the time, and was too busy watching “Get Smart” reruns and not doing his homework to be involved.
