Tag: Reputation

The Reputational Costs of Litigation: Lessons from Pao v. Kleiner Perkins

By Mike Kuczkowski

Silicon Valley is abuzz with Ellen Pao’s gender bias case against venture capital firm Kleiner, Perkins, Caufield & Byers.

A former junior partner at KPCB, Pao, 45, alleged that male partners discriminated against female junior partners. Pao, who worked at KPCB for seven and a half years, said she was sexually harassed by a former partner. She claimed the firm retaliated against her by firing her after she filed her lawsuit.

Pao lost on all counts.

Pao’s lawsuit is a case study in the importance of communications to parties in a litigation. Delivering great communications support in the courtroom requires focusing on reputation as an outcome. Depending on what’s at stake, that can be as important as the verdict.

You can see that Pao tried to claim a reputational victory. In a post-verdict news conference, Pao said “If I’ve helped to level the playing field for women and minorities in venture capital, then the battle was worth it.”

That’s a big “if.” Many commentators agree Pao opened an important debate about the treatment of women in the corporate world. But in the course of her lawsuit, she shined a spotlight on bad behavior on both sides. And she ultimately failed to persuade a jury she had been wronged.

Here are some of the more salacious claims that emerged during testimony:

Claims that Impact Reputation

Ellen Pao Various individual partners at KPCB
–       Kept a “chart of resentments” against her Kleiner colleagues –       Consciously excluded women from a private dinner with Al Gore, saying that they would “kill the buzz.”
–       Had an affair with a married partner – who claimed his wife had left him, which later turned out not to be true – for six months –       Openly discussed their favorite porn stars on a private plane, when Pao was present (that’s according to Pao; another witness disputed this claim)
–       Sent negative emails about colleagues to partners behind the colleagues’ back –       Excluded women from a business ski trip
–       Was paid $200,000 in severance over a period of six months after being fired. –       Gave Pao “The Book of Longing,” a Leonard Cohen book of erotic poetry featuring nude drawings, as a Christmas gift
–       Is married to disgraced ex-hedge fund manager Alphonse “Buddy” Fletcher, who himself has a history of discrimination legal claims. (His personal debt has been offered as a motive for Pao’s legal action.) –       The same male partner who’d had an affair with Pao showed up at the room of another female Kleiner partner wearing only a bathrobe and slippers (He was later fired for this and other harassment.)

These gossipy details will stick with both Pao and her former employer for some time, and may have far-reaching implications. Both parties have the challenge of proving that they are not the versions of themselves on display in the worst days of court.

The Role of Communications

This is why communications should play a vital role in litigation.

In a litigation as high profile as this one, media relations is front and center. A lawsuit is conflict in a capsule, a natural draw to journalists and editors. I’ve been through this dozens of times, both as a journalist and as a PR professional. The legal filings and courtroom activity provide an easy narrative for reporters to follow, as two parties seek resolution of their claims. Day in, day out, reporters will look for a news hook in legal filings, courtroom strategy, testimony and jury deliberations, even if the actual proceedings are as dull as watching paint dry.

Many lawyers use media relations as a tactic to advance their own reputations during lawsuits. I’ve been in a situation where, after a good day in court, lead counsel of a high-profile lawsuit called me to urge the Wall Street Journal to run a prominent piece about the proceedings. I had to explain to him, an accomplished jurist, that that is not how media relations works.

Keys to Good Coverage

If you want good media coverage, you need to look beyond ‘winning’ each day in the media. First, you have to take the time to help reporters understand the process. Meet with them and a member of the legal team in advance of the proceedings. That way, you can brief them on the fundamental claims, the legal issues at stake, the key players and the calendar of events.

Then you need to align with the legal team on the day-in, day-out rhythms of court activity. What’s happening each week, and what do we expect from the other side. All of these details are worked out in advance, but often they are not shared with the communications team. If you can signal to reporters what to expect, you can become a trusted resource to the press, and that in turn will drive the media coverage. Reporters must file a story. That’s what they’re paid for, and in the era of the never-ending news cycle, they are often filing 140-character stories throughout the day. And like many people in many jobs, they appreciate knowing in advance when nothing interesting is going to happen.

In litigation like Pao’s, the attorneys for both sides are seeking to give their client the best representation possible, and to win their case. This invariably involves multiple fine-point decisions about legal strategy and obscure legal arguments. Some of this can get very arcane very quickly. And at times, what is efficient in the courtroom is not effective in the media.

An Approach for Litigation Communications

Once the lawsuit is in front of a jury, the role of the communications team is distinct from the legal team, but valuable. They should:

  • Own the narrative: Distill the essential legal maneuvers and arguments into comprehensible messages and narrative points.
  • Be compelling: Why does this matter? If millions of dollars are at stake, as is often the case in complex civil litigation, there’s most likely a compelling issue of fairness or ownership in play.
  • Make it relatable: Translating the legal issues into something we can all relate to is critical. Ultimately, many disputes ultimately come down to matters of fairness, ownership or righting a wrong. Who can’t identify with that?
  • Align the narrative with the legal strategy: Words matter. You can’t say things to the media that are at odds with what the legal team will say. Mine the legal team’s approach for a narrative and key messages.
  • Be resilient: There are three sides to every lawsuit: One side, the other side and the truth. Consider what the other side is going to say and how they will characterize or rebut your claims.
  • Be a resource: Lots of things that happen in court are complicated. If you can be the person who can explain it to the media, then you can be a valuable resource. And that means, you can get the ear of the media when it matters.
  • Strive for clarity: Lawyers are usually precise about the words they use. However, legal jargon can sometimes displace clear, simple language. Get a copy of Black’s Law Dictionary. Dig in and understand what the legal issues mean, and find the simplest ways to convey them.
  • Use the facts: Lawsuits ultimately involve a set of facts assembled to support an argument. That’s a framework with which communicators should be very familiar.

Reputation v. Litigation: Focus on Outcomes

Legal disputes have an ending, but reputations are enduring. In the end, both matter.

In the wake of the verdict, Pao is casting herself as a crusader for women’s issues. It will be interesting to see if her long-term career moves and activism keep her at the center of that cause, or whether that narrative was merely expedient to justify her actions. Anyone who will bring her on board as an employee (she is currently the interim CEO of the social media site Reddit) will now be aware of her tendencies.

For their part, Kleiner faces serious questions about its culture. Several observers have speculated that the firm may need to restructure. That’s no victory. It’s hard to imagine the lawsuit will improve their recruitment efforts among junior female applicants. Female business leaders may turn elsewhere for finance support.

Now, it’s up to us to decide whether what the firm said in a post-verdict email to reporters is true: “Today’s verdict reaffirms that Ellen Pao’s claims have no legal merit. We are grateful to the jury for its careful examination of the facts. There is no question gender diversity in the workplace is an important issue. KPCB remains committed to supporting women in venture capital and technology both inside our firm and within our industry.”

The lawsuit is over, but both sides lost the battle of reputations. Now the process of rebuilding begins.

Orangefiery Memo | Open Letter To Tim Cook

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DATE:       August 19, 2014

TO:             Tim Cook, CEO, Apple

FROM:     Mike Kuczkowski

RE:             Apple Communications Leadership

Much has changed since Apple hired its last communications leader in 1996. We thought we’d offer some thoughts about the communications function and the role of chief communications officer, as you head up a search for the successor to Katie Cotton, who retired at the end of May.

Admittedly, we don’t know much about Apple’s communications. We know Ms. Cotton was highly respected and regarded as a gate-keeper of Apple news and the Apple brand. We know the company has not used agencies, has a strong internal team, has been highly secretive (note: paywall) about company developments and discourages employees from speaking publicly about the company. We also know Apple has been a tremendously successful company, particularly in the period of 1997 to present. It tops the league in rankings of brand value and corporate reputation. And, it cares deeply about the clarity and quality of its communications. All of which begs the question: Why change? Fair enough, we’ll try to address that along the way.

What’s new

Communications has always been a critical business function, but the explosion of information, technology, connectivity and communications channels in the past 15 years has made it far more complex.

Here are the biggest trends:

  • The media environment today is always on and global, so the notion of a news cycle no longer exists.
  • The ease of online publishing means that stakeholders have powerful ways to communicate and advance their personal agendas without the traditional media’s editorial filter.
  • The rise of social networks means that news moves faster than ever.
  • And the nature of influence, by virtue of all these factors, has changed, though few people can say precisely how.

For Apple, this creates competing tensions. On the one hand, you increasingly need communications people with highly specialized skills that can master the nuances of engagement in all these channels. On the other hand, you need someone who can connect all the dots. It’s all one brand. It’s all one voice. For better, or worse.

Assumptions

Communications strategy must align with business strategy. We don’t know your business strategy intimately, so here are our assumptions:

  1. Apple will continue to bring new products to market in new categories while improving products in existing categories, consistent with its track record of innovation. We don’t care if it’s an iWatch, iHealth, iTV or an iCar… (actually, we’d really like an iCar). But we assume that in general you will continue to disrupt new categories with remarkable products.
  1. Apple will continue to face considerable scrutiny for anti-competitive behavior, IP and trade practices, Foxconn and labor practices, tax policies, collusion with other technology companies on hiring practices and environmental issues.
  1. You are leading Apple through a subtle but significant shift, empowering developers to collaborate more within its operating ecosystem and breaking down traditional barriers to openness in the context of its products.

Recommendations

Based on these assumptions, and the changes in communications and the marketplace, we offer the following recommendations for your lead communicator and the function overall:

1)     Corporate storytelling: You need someone who can articulate and advance Apple’s corporate story in multiple ways and across multiple channels. You clearly understand this, based on the more narrative approach you’ve recently taken to product marketing communications (e.g., ‘Stickers’). This doesn’t mean you should hire a children’s book author as your lead communicator, but you should hire someone with the ability to convey powerful, simple, clear stories about the company moving forward.

2)     Integration: Your leader needs to be able to integrate your stories to Wall Street and Main Street, and beyond. As the silos between audiences have broken down, people expect to see how it all ties together. You can’t have a story about sapphire iPhone screens and not anticipate some reactions – even ill-advised ones – from outsiders, for example. Your communications leader must be exceptionally strong at this and at identifying areas where you are at risk of delivering potentially dissonant messages to developers, suppliers or consumers. Again, the notion of a singular voice and brand will be brought to life by your communications function, and it’s critical that your leader be adept at this.

3)     Systems thinking: The world of communications moves so fast today, it is virtually impossible to maintain a centralized command-and-control approach. (And we say that while maintaining that there is nothing wrong with pushing for confidentiality and secrecy in product planning cycles.) Think of your communications infrastructure as a network. Most of the action — the interface with the outside world – happens at the nodes, rather than at the center. You need a communications leader who can empower the system of communications – whether through internal communicators, leaders, agencies or a combination of all three – and get great results. This will require substantial amounts of centralized planning, training and performance enhancement. This means you’ll also need someone who’s highly collaborative and willing to invest in talent development.

4)     Multi-channel skills: Don’t just hire someone who’s good at media relations. Hire someone – and surround them with a team – who can think about how to leverage all the potential channels in which you can tell your story. You also need to activate corporate embassies on Twitter and Facebook. Apple has the power to be a social business success story, but it can’t be if it’s not active in the social media space.

5)     Research capabilities: Your communications group should be constantly absorbing qualitative and quantitative data about your audiences, looking for insights and advising the organization about its actions. There’s so much data now about, well… everything. Your communications team should be facile with data, ask smart questions, and be able to find meaning in the numbers.

6)     Two-way orientation: Related to the research point above and the accountability point below, communications at its best is a two-way function, delivering insights to the organization while also representing the organization to the outside world. This is both art and a science. But if the proper channels are established internally to turn insights into actions, the communications team can be a powerful partner on key strategic (public) issues.

7)     Transparency: This is one of the few strategic choices companies can make from a communications perspective to build and maintain trust. Historically, you’ve gone the opposite way. There’s no obligation to be transparent about upcoming product releases. Until you launch something, it’s not news. But you can and should drive greater transparency around your environmental footprint, labor practices, privacy policies and other issues.

8)     Accountability: The public relations industry is a mess when it comes to measurement, but the function itself should be measurable and accountable to leadership. There’s a huge lexicon gap between marketing and public relations, but with all the data we’re now gathering about people, their behaviors, and what influences them, we should be able to do more to understand the impact that effective messages/narratives and smart, strategic deployment of those messages can have on stakeholders.

That’s it. Eight points. We thought there might be more. We wish you tremendous success finding that leader and building the infrastructure and the team. [1]

[1] Full disclosure: We have been Apple customers since 1989, when we bought our first Apple Macintosh SE. We’ve followed the company closely, and currently own two iMacs, a Macbook Pro, three iPhones, an iPad an iPod, as well as multiple peripherals and more iTunes songs and movies than we care to admit. We may sound critical, but we want you to succeed.