SeanReadsTheNews

Happy Memorial Day - Sean Not Reading on Monday

I'll be off Monday in observance of Memorial Day.  Hug a veteran and watch Turner Classic Movies.

See you Tuesday.

Sean

USA Today on Zero Energy Houses

Wendy Koch, the environmental blogger for USA Today delivered a whopper yesterday, interviewing the author of book on energy-efficient housing and accepting a contention that better insulated windows could dramatically reduce dependence on oil and gas.

Homes are increasingly being built in the United States to use little or no energy, a trend that could help reduce U.S. dependence on oil and gas, according to a new book.

It could - but that's a big could and how do you quantify "help"?  Houses are orders of magnitude more energy-efficient now than they were in the 1950s - but we use more energy than ever.  It's a great placement for author David Johnston but let's check back in 10 years to see if we've really reduced our reliance on oil and gas that much.

Why Brett Arends Doesn't Trust Gold

Bret Arends of The Wall Street Journal continues his series on gold today.  I blogged the first entry in passing earlier this week because it mentioned gold being a bubble but I'm mentioning it today because it has the funniest description of why gold's reputation as a store of value is overrated I've ever seen.

Gold is volatile. It's hard to value. It generates no income.

Yes, it's a "hard asset," but so are lots of other things—like land, bags of rice, even bottled water.

It's a currency "substitute," but it's useless. In prison, at least, they use cigarettes: If all else fails, they can smoke them. Imagine a bunch of health nuts in a nonsmoking "facility" still trying to settle their debts with cigarettes. That's gold. It doesn't make sense.

As for being a "store of value," anyone who bought gold in the late 1970s and held on lost nearly all their purchasing power over the next 20 years.

Not to go all goldbug monetarist on you - but the reason investors ignore that argument is that the other choices are all government-run fiat currencies (every one of which in the history of history has ended with a value of zero) or other commodities that are even harder to store or value. 

Right now, everyone is looking for the least-bad option and a sizeable percentage of them chose gold.

Still, the column is an entertaining piece of writing delivering a serious warning not to get carried away.

WaPo: Pearlstein Separates Cause from Response in BP Crisis

Steve Pearlstein of The Washington Post writes a column praising the spill response by BP that echoes many of my thoughts from yesterday's post.  It's one of the first laws of blog writing that when that happens, you link it.

But to their credit, rather than respond in ways you would expect them to, BP and its executives have generally responded in ways you'd want them to.

From the start, the company has declared that it is ultimately responsible for what happened and responsible for making things right, waiving any liability limits it might be entitled to under federal law.

That's exactly my last word on the subject.  BP has a lot to answer for in regards to its long-term safety record (they blew up a plant in Texas in 2005 among other problems) and clearly they got ahead of themselves in drilling in water so deep there was no way to respond if something like this happened - but since the spill they've been spot on. 

Pearlstein compares them to Tylenol, whose iconic aggressive response to a tampering episode is now a PR/management case study but that's not an apt comparison.  Tylenol was a victim of sabotage and ultimately the responsibility for that act is with the saboteur.  BP, through arguably lax oversight of its Transocean subcontractor, was done in by its own lack of preparation and its culpability is much higher.

That said, any argument that BP didn't try as hard as possible to fix the problem it caused is just fulminating.  A lot of the coverage reads like the activists and journalists are upset that the company isn't dissembling, lying, covering up or trying to evade responsibility and that's making reporting on it less fun for them.

Kudos to Pearlstein for calling B.S. on that nonsense.

Bloomberg on Cancer Breakthroughs

Shannon Pettypiece of Bloomberg News has a strong article today on a potentially huge breakthrough in cancer treatment that involves marshaling the natural immune system against cancer cells.

Leading the push is Bristol-Myers Squibb Co.’s experimental drug for skin cancer, one of dozens of immunotherapies to be spotlighted next week at the American Society of Clinical Oncology meeting. In its late stages, melanoma can be lethal within months, killing more than 65,000 people a year. Bristol- Myers’s drug, called ipilimumab, extended life in its deadly final phase, three small trials have found. If those results stand in data reported at the meeting, the drug may get U.S. regulatory approval as early as next year and may be in doctors’ hands in 2012, the company said in March 4 investor call.

I always like reading these stories but I've been around long enough to realize that few of them have happy endings. Back in the 1980s, The Wall Street Journal had a science/medical reporter named Jerry Bishop.  Jerry would report a cure for cancer pretty much weekly.  At a time when the WSJ was the bastion for hard-headed, clear-eyed realism in its reporting, Jerry made every random press release from a biotechnology company B1 above-the-fold news (and that's when the paper only had three sections, and the third was 95% data).

Today, sadly, almost all of these stories that are packed with promise end as this one does, with a disclaimer.

“The hope is that we aren’t just extending, but that we are really curing people with widespread cancer,” said O’Day, the researcher in California “It is a little early to say that, but there is hope.”

Gapper's FT Article on Paywalls Free to Google Users

It must be interesting to be Rupert Murdoch.  You're the most successful newsman of about three generations in terms of drawing an audience and making money and yet everyone gets in line to tell you you're doing it wrong, today that person being John Gapper of The Financial Times.

Radically reducing the readership, becoming more specialist and charging more for news than his rivals is not his style. Yet that is the logic of charging for online access to The Times and Sunday Times; having marched them downmarket, he must march them up again.

This is what his head should be telling him to do. Newspapers have found that chasing page views in the hope that advertising will save them is hopeless. Premium news and information providers either have to have another source of revenue - like the BBC, Bloomberg and Reuters - or a solid subscriber base.

Sentimentally, I agree with Gapper but his argument comes down to "All of these papers were better before you bought them - and they were unprofitable, failing enterprises."  As much as I miss the Bancroft-era Wall Street Journal, for example, they were closing their bureaus in Canada when Murdoch bought the paper.  That's the U.S.'s biggest trading partner and they didn't need boots on the ground there?  The WSJ is the only major U.S. paper to gain circulation in the last few years.  The New York Times only survives because a monopolist billionaire from Mexico keeps bailing them out.  As much as grumpy old newshounds dislike it, whatever Murdoch's doing, it's working.

I highlighted this piece also because of the contradiction of an article about the need for paywalls being behind a paywall on the FT's site but free if you Google "John Gapper" and go in from there.  I'm waiting to see if a hard paywall is really the answer for online news organizations.

WSJ Op-ED on BP Reputation Management

The Wall Street Journal editorial page is a tough get so kudos are in order to Dan McGinn of TMG Strategies for co-authoring a piece on BP's tough road in reputation revival in today's edition.  As of this morning, it looks like BP has finally capped the well so the news will naturally shift even more to litigation, costs, Congressional hearings and the like.

I do wish there was more substance or controversial advice in the article, as most of the points don't really represent "new rules" as the authors suggest but rather what great companies have done forever, i.e. question their business practices, prepare for problems, tell the truth, plan ahead, etc.

There is a good point about the value of advertising - the authors remind us that a decade worth of advertising spend blew with the rig in the Gulf - as well as why "spin" is a bad metaphor for PR practice.

Consider oil company BP, which is now watching the halo created by a decade of smart advertising vanish as a mammoth oil slick makes its way across the Gulf of Mexico. BP's "Beyond Petroleum" campaign had positioned the company on the green side of energy development. But its sunken drilling platform—and the resulting environmental catastrophe—has sent it firmly back into dirty carbon company territory.

Maybe that is the lesson of where the company really went wrong.

BP's safety record has been questionable for a while and chasing trendy slogans aping the language of environmentalists who act as though they resent the blessings of modern life was a poor use of corporate resources. 

Both the company's reputation and the environment would have been better off if BP's leaders focused on making it the best oil company it could be than trying to be a "green" company.

Newsweek on a Counter-Intuitive Talent Crunch

Mac Margolis of Newsweek reports today that despite an unemployment rate pushing 10%,companies still can't find the right employees.

Struggling back from the last two bruising years, companies of all sizes and across the economy are facing a massive shortage of top-tier management. Turnover in the commanding heights is intense. Wages are spiking as rival employers wage star wars. Corner offices are empty. “Thirty percent of employers across the globe continue to struggle to fill positions available,” Jeff Joerres, chief executive of the recruitment agency Manpower, told the World Economic Forum earlier this year.

This one is a fairly standard Halley's Comet - different consulting and recruiting companies push the "war for talent" story periodically, usually backed up by demographics about an aging population and anecdotes about how Americans all stink at math (both are in here). 

What I think is hilarious is that this article follows about a dozen in Newsweek and its sister publication The Washington Post arguing that corporate managers are overpaid.  Margolis attempts to address this point - but he doesn't really close the loop.

Throwing money at managers won’t stop the corporate brain drain. But more long-term thinking might. Oil companies learned the hard way: after gutting staff, R&D, and prospecting when world energy demand slumped a decade ago, the entire industry is scrambling for engineers and geologists. An exception was Brazil’s Petrobras, which decided to buck the recession and poured money back into training and recruiting. “When you cast the net into the sea you get soft-drink cans and old boots, but you also get lobster,” says Mariângela Mundim, head of human resources at Petrobras. “Fortunately, there’s a lot of lobster out there.”

Actually, there is no reason given in the article why increased compensation won't attract better managers.

I'll add finally that although this article is recitation of long-term management consulting talking points it does include strong writing on the globalization of the talent pool and why it is hurting the U.S. that Indians and Chinese are now finding it easier to work in their own countries than here.  That's a scary long-term trend that does deserve more attention.

WSJ on Green Food Packaging

Wall Street Journal food reporter Anjali Cordeiro reports on how a bioplastics manufacturer is selling biodegradable packaging to the food industry in today's issue.

Following recent Food and Drug Administration approval, Metabolix can sell its biodegradable Mirel bioplastic for use in disposable cutlery and food-related packaging such as beverage caps and coffee lids. Bioplastics are plastics made from environmentally friendly materials, such as plants.

The article is a good first look at the issue, pegged to an FDA approval that allows these plant-based plastics to be used with food.  A good follow-up would be exploring how the new materials fit into the waste stream and whether they will truly mean less volume in landfills or if this is just greenwashing.

The Biodegradable Products Institute is the traffic cop for such claims, it would be interesting to get their take on the issue down the road.

My early days in the PR industry were spent working with plastics and chemical manufacturers and there was a lot of misinformation in the market then about was and wasn't environmentally friendly.  I'm still interested in these issues.

Wired on the New Steve Jobs: Man of the People

Brian X. Chen of Wired forces me to return to an out-of-favor topic, how awesome is Steve Jobs, by linking the CEO's latest personal behavior to a one-man PR initiative to help Apple sell its walled garden vision of the Internet.

Jobs typically shies away from the public spotlight, but with these e-mails he has been transforming his public persona into that of a leader who’s well-connected with his followers, as opposed to a man running a business, says Brian Solis, a new-media branding and public relations expert.

“What he is trying to do is strategically pick the right people that are going to literally spread his word verbatim,” Solis said. “With just one e-mail he’s able to talk to the entire world.”

This article is the latest example of public relations being covered as a business discipline based on its ability to drive economic value, not soft metrics like "perception," and thus is noteworthy.

The article quotes several PR gurus on why Jobs needs to humanize his vision of Apple, why a genuine rock-star hero leader is necessary for the company at this juncture and how much it means for companies with non-famous leaders (answer: not much).

Of course, the kicker reads like journalistic wish fulfillment - successful leaders will get rid of their PR and be genuine! 

“Leaders are going to have to shed the filters they once hid behind, one of them being public relations, in order to lead,” Solis said. “That’s what people are looking for them to do. Facebook and Steve Jobs are leading communities into places they’ve never been before.”

Yeah, sure.  As I've said to my frustrated media friends before, I know the other side having savvy counsel is frustrating to you - but too bad.  It's not like if you had gone into law you could go into the courtroom and lament how much easier your job would be if it weren't for the other side having lawyers too.