CHAPTER 9

Competition

Competition is the lifeblood of business. We compete with other companies, agencies, and employees. The desire to get ahead can lead many to skirt the ethical line.

PRSA’s Code of Ethics states:

Ethics and Competition in Action

This chapter takes a deeper look at ethical issues that come up in competition.

New Business

For agency executives, nowhere does this come to light more than in the pursuit of new business.

Dave Close, the retired Managing Director of MSL Boston, elaborates:

A tremendous amount of energy is spent feeding the machine and acquiring new clients. There are ethical challenges in the endless pitching process. I can recall several instances where we probably could have won a big client assignment if we had been willing to make promises that we probably ultimately couldn’t fill. Or agree to client requests or requirements in their RFP that we knew we couldn’t fulfill, and probably couldn’t be done. There were cases where we didn’t win a new client because one of our competitors had promised them things that we knew they couldn’t deliver.

One was a relatively low fee assignment that we didn’t win. I asked why and they said, “this other agency promised us four vice presidents on our team.” That is not going to happen.

Most agencies keep things very ethical and honest in the pitch process because that’s going to set the tone for the entire relationship. If you start the relationship on a set of false or unreasonable promises or impossible expectations, it’s not going to go well.

There’s a famous saying in the open-source software world, “Information wants to be free.” Not as in free beer, but it wants to be set free, information will have freedom. That applies to the truth as well in any kind of communications or messaging effort. The truth will set itself free. There’s never anything to be gained in the long run by trying to trim or alter the facts.

Ken Hunter, President and Chief Strategist at The PowerStation, discusses what to do when your boss makes unethical promises during a new business pitch:

I didn’t say anything the first time I heard an unethical promise in a pitch, but in the car drive back to the office, I mentioned to that boss that there’s no way that the story ideas they talked about in this meeting are going to be appropriate for The Wall Street Journal. He was like, it doesn’t matter, we’re just trying to sell them on hiring us and whatever it takes to close the deal. I said, I understand with new business that there is a degree of salesmanship. However, as a public relations person, even if my roommates from college were all the top editors at The Wall Street Journal, there’s no way I could ever guarantee the story being covered.

There are way too many factors that will impact it. Some prospects that will say, “We want to be in a lot of top media.” It’s very important to honestly tell them, here’s why you’re not there yet. If that’s where you aspire to be, we’re going to have to take steps to get you there. It’s not just me with a connection. Let me call my old college roommate and he’ll be happy to run this story. That’s not how it works. Plus, it’s unethical if I put my friend in that place if I say, look, I have a client that’s breathing down my back.

It goes beyond your connections. Many times, I’ll hear, “We want to be on the Today Show.” But probably one half of 1 percent of Today Show viewers are the target audience. I ask if this is a potential piece that’s more for your ego or is it going to be better for your stockholders, your investors, your employees to be able to look at a much less glamorous trade publication. Usually, you can win that argument for short time, but then eventually, they’ll get the stars in their eyes and say, are we ready yet for our big, big close up, Mr. Demille…

Angela Sinickas, CEO of Sinickas Communications, highlights three ethical missteps with the proposal process.

Some of them are kind of clichés, but they’re still a wrong.

• One of the clichés is that when you’re hiring a PR firm or an agency, you meet different people. They typically send you the senior people, and then if you hire them, you might never see that senior person again. You’re going to be working with a junior person you may never have met.

The cliché is that people sort of say, “Well that’s what you should expect.” But that’s wrong. Yes, you should still have the senior people going to those proposal meetings, but you should bring in the junior people who will be the actual project managers so that the client gets a chance to see, do we have a good personality connection here? Is this someone I can work with? Because that’s who they’re going to be having to work with.

• Another thing is I see people bidding on projects they’re in no way competent to do. I do research and measurement full time. At first, I noticed that PR firms would start doing employee communication consulting, not using specialists and employee communication, just saying, “Hey look, we can do this too. It’s just communication. What’s the big difference?” Or they would start doing research even though they had no research background. How hard can it be to just put together a survey on SurveyMonkey? They’d bid on things they had no capability to do.

It’s an easy fix too, if you want to expand into that direction, you hire someone with that skill, or you get a subcontractor to work with you in doing that kind of project. It’s so easy to avoid this type of bait and switch.

• The big elephant in the room is cost estimates for proposals. When I create proposal estimates, I provide very clear assumptions. If these are the number of questions we have on the survey, the number of languages, online only or online and print…. Given these assumptions, this is what the range will be, and it will not be exceeded.

A lot of times, to win people will come in with a low-ball bid and not put all those assumptions in there. Then they go into the project planning meeting…. Oh, you wanted more than 10 questions on your survey? Well then, the budget has to be much higher.

That’s slimy. But they do it to get the foot in the door. And at that point, the client is probably going to keep working with them because they’ve made a commitment and people don’t like to admit that they’ve made a mistake.

If you happen to be a vendor whose budgets maybe are a little bit higher … explain why. Say, “This is what you would typically get from another vendor. But the way I do this work, you get not only this report, but you get this report, this report, and you get recommendations.” Explain what they get for that additional value, and if they don’t want all that additional value, then you can reduce your own costs.

Marisa Vallbona, Founder and President of CIM, Inc. PR, discusses what to do when people steal your ideas:

I was ethics officer for the San Diego chapter of PRSA and I was called frequently to police ethical challenges. There were four that were quite frankly pretty shocking.

1. I was called about an individual who started spreading rumors about the owner of a PR firm so that the employees would leave that firm. Then he would recruit those employees. They were malicious lies. The owner of the PR firm contacted me when he found out that this was happening, and he reported it to me as ethics officer. I contacted the person who was spreading these lies. The person, of course, denied it, but we had proof. I contacted the employees who had been the recipient of these malicious rumors, and we got to the bottom of it.

2. An agency submitted work and passed it off as their own when clearly it belonged to someone else. Clearly, it was copyright infringement, and that just blew me away.

3. There was an employee who silently collected data while employed by her agency. And then, she did everything she could to sabotage that agency. She was discovered and fired.

4. An agency was just getting started, and they contacted me, and said, “We would like to hire you as a consultant because we’re fascinated by what you did, founding PR Consultants Group. We want to hire you as a consultant to learn what you did because we want to understand that model.” I told them, “Okay, this is proprietary information. I’m not going to give you the exact model, but I’ll explain to you what we did.” I didn’t share with them exactly what we did. I gave them the bare skeleton of it.

Two months later, this PR firm launched using our exact model. They used our map of the United States. They used the exact tagline that we had. We had to file a lawsuit against them for trademark infringement. What just blows me away is how, I don’t want to say how stupid people are, but how they just don’t think.

You know what? I do want to say that. They just don’t think things through. They’re not inventive enough or confident enough in their own capabilities to do their own work. They have to steal other people’s work. It’s crazy.

When I uncover IP theft, in the past, I’ve been kind enough to contact the individual and say, “This is my work.” Unfortunately, I have found that it doesn’t always work. So, I also have a good corporate attorney who writes, as we say in Texas, “Bless your heart” letters, and that seems to work.

I had a situation once that blew me away. An individual tapped a few members of the PR Consultants Group when she was starting her agency. There were a few of us who collectively had won a few PRSA Silver Anvil awards. She thought, okay, this is going to be a great way for me to get in and get some new business. She was good at getting new business.

But what was interesting is, she put on her website that she had these clients, that she had won these Silver Anvil awards. When we discovered that, we asked her, please take this down. You did not have these clients. These were not your clients. These are not your Silver Anvils. You can say that some of the members of your team have worked with these clients. Some of the members of your team have won these Silver Anvils, but you can’t say that you did. She didn’t see the distinction.

Steve Cody, Founder and CEO of Peppercomm, also highlights ethical failures with IP theft and RFPs.

I hate to say it, but it’s an easy way to get new ideas. If the pressure is on, and you don’t have the budget, and you don’t necessarily have a moral compass, it’s pretty tempting to do an agency search, have them come in, give you some great ideas, and then come back and say, “Geez, you know what? The budget that we thought had been approved in November, it’s still being debated, so we’ll get back to you,” and you never hear from them again. There’s still a tremendous amount of that going on. It’s not being policed, and it should be.

Ad Age did a big expose on it, but it’s happening all the time in PR. It’s as if it doesn’t even exist. You will not find articles in PR Week or Holmes about it. It’s like it’s not happening, but yet it’s happening to every single agency, and we’re losing time, money, and intellectual property, the whole nine yards. Somebody’s got to step up at some point. If one big agency draws the line in the sand and says, “No more. You’re going to pay us for our ideas. We’re going to come in and present them. If you don’t like them, that’s fine, but we’re getting paid.”

“Well, four other agencies said they didn’t need to be paid, so if you’re insisting on being paid, we’re not going to let you pitch the business.”

“Okay, fine.” At least you’ve put the line in the sand. We’re going to start doing that as much as possible. I mean, if we do get a Google or a Facebook asking us to pitch, maybe we’ll waive that proviso, but if it’s Joe and Bob’s Tree Nursery asking us to go up to Nashua, New Hampshire, to pitch against three other firms, I am not going to do it, unless they pay our way and pay for our ideas.

We’ve instituted that, over the last couple of years as much as we can. Companies respect it. They’re not happy, but they respect it. Some of them are very taken aback and will say, “No other agency has asked that.”

My typical response is, “Well, not every agency is Peppercomm.” They’ll come back, and typically they’ll say, “We’ll meet you halfway.”

If it’s a good. If it plays to our sweet spot, and they’re willing to meet us halfway, in terms of the out-of-pocket cost, we’ll go. If they say, “No, you’ve got to pay,” we just won’t do it.

Another failure ethically is who is in the room for a new business pitch. We end all of our new business pitches by saying, “I hate to break it to you, but what you see is what you’ll get.” I don’t bring in people from central casting, who were press secretaries and former governors. We don’t play that game. We don’t bring in the A-team and dazzle the prospect, and then if we are fortunate enough to win, all of a sudden, they’ve got a 24-year-old, a 26-year-old, and a 22-year-old.

We win quite a bit of business by picking up the pieces after an organization has been burned by a bait and switch. It catches up to you big time, and you get a reputation within the corporate world when the CEOs gather together.

Competition and Personal Values

Another issue with competition is balancing the desire to bring in revenue with the desire to only work with clients you believe in. Erin Callanan, APR, Director of Media Relations for GBH, explains:

You have to trust your gut. If it doesn’t feel good, don’t go there. You have a responsibility to your employees to bring the business in and to ensure that they’re getting paid every month. To do that, you have to have clients. But there are clients out there where their story isn’t quite as solid as it should be. You know instinctively, if it doesn’t feel right, it’s going to be a hard client to support. You have to trust your instincts on that.

I don’t think that a lot of clients are intentionally trying to lead people wrong. They look at PR and don’t understand how important it is to be truthful, accurate, and honest, and how that will help them grow.

If it doesn’t feel right, your client goes away unhappy, you feel unhappy. Nobody wins in that process. I learned the hard way a couple of times, but you must trust your instincts.

David Calusdian, President of Sharon Merrill Associates, elaborates further:

When I look back at the most difficult ethical challenge I ever confronted, I go back to before I got into IR. I was in grad school as a political communication major, and I was trying to get candidate clients for a nascent political consulting business that my friend and I wanted to start. We were introduced to a great candidate who was running in a primary to capture a seat from an opponent who we really wanted to unseat. This guy was smart, well spoken, had a stellar record in the community, and really cared about doing a good job for the people. He wasn’t on an ego trip. He wanted to make a difference, and he was somebody that we liked. We thought we could make a difference in this campaign.

Then we found out he was on the wrong side of one particular issue that we both really cared about, and we faced a tough choice. Do we not take this business that would be great for us professionally and work with this guy who, other than this one issue, was a great candidate who lined up with us politically? We spoke with friends and family, and in the end, didn’t take him on. That one issue was just too important to us.

I always come back to that story because it shows how it wasn’t a black or white issue. This guy was a quality guy. He just was not lined up with us completely. Thinking about politics, it’s not like you’re getting married to the candidate. It’s more like getting on a bus and going in the right direction with someone. When you’re working with a client, you need to think about does the company overall reflect your values. Can you do a good job for the client and know that at the end of the day you’ve contributed to the greater good?

Ironically, we ended up working with a candidate who was totally in line with us, hook, line, and sinker on everything, but was just a terrible candidate. We took the loss on that one, but we’re glad we took the route we did. I always think back on that and know that you need to always live your values, and that goes for any client that you’re taking on as well.

Cheryl Procter-Rogers, APR, Fellow PRSA, a PR and business strategist, shares an example when she was asked to spread bad information about a competitor:

Often, we don’t even realize that we have faced an ethical dilemma until the stuff hits the fan. Then you realize you’ve stepped in something, and you’ve got the mud all over your shoes. For me, the most challenging issue was when an executive of an organization I was working for asked me if I would make a call to a reporter at a major publication to spread some bad things about one of the leaders of a competing organization.

At first, I thought it was a joke. When I realized the person was very serious, I didn’t know how to position my answer in such a way that I wouldn’t get fired immediately, or that worse yet, I would lose credibility. I felt up until that point that I was becoming the go-to person. I was very young in my career, and I just didn’t know what to do.

So, I didn’t answer right away, which I now realize was a mistake, and I called my mentor, Chester Berger, and told him I felt very uncomfortable, this was not something that I wanted to do. Even though the information may have been true, I had no evidence that that information was true.

I got great advice from Chet, and that is, “Always align with your values, never your bank account.”

So, I went back into the office, and I said, “You know, I’m not comfortable doing this. This goes against who I am as a professional, and if that’s going to be an issue for you, let me know now.” I was not fired, but it was a valuable lesson for me in how I felt that I didn’t have the power to say no when in fact I actually did.

If other people find themselves in similar situations, they should they take a deep breath, and if they feel it’s important, talk it out with someone.

For the young professional, it’s a very scary moment, but do not to feel that you have to respond right away. Much like we say in media interviews, don’t be afraid of silence, and take a moment and think it through. If you’re having some feeling in your gut, or in your heart, that this is not right, ask for a little time to step away, and consult with a trusted advisor who can give you some guidance, not just on what you should or should not do, but how you should communicate your response to the ask.

Looking back, I realized I didn’t have a framework for decision-making then. Without it, I was being very indecisive, and my communication was poor. There are so many different frameworks for decision-making. Google the topic and find a framework that you can use that will help you. For instance, the first thing you’re supposed to do is make sure you have sufficient information, and then the knowledge and the skill to make sure that’s all aligned.

So, if someone is asking you to do something that is not in line with your background, knowledge, or experience, and it can have a significant impact on your organization, you must speak up and state it. Sometimes, we have this hesitation, especially when we’re young, we don’t want to seem dumb. We don’t want to say we don’t know. You should always be transparent and honest and let your manager know that this is not your area of expertise or knowledge.

Next, always think about all the possible outcomes and not just the outcome that you want. Sometimes, with situational ethics, the situation calls for some action, and you could possibly do something terribly wrong, but for a greater good. You must make sure that you’re not in that kind of dilemma where you’re so focused so that you don’t end up saying “Well, you know, all we want to do is make sure all of these starving individuals are able to eat, and the fact that we’re stealing the food, well I can’t really matter right now.”

Yes, it does.

Finally, after you think of all the possible outcomes, make sure that any decision that you’re making aligns with your personal values and the values of that organization with which you’re working.

Ethics and Competition Advice

When it comes to competition, Deirdre Breakenridge, bestselling author, reminds people that we often fail when we make choices alone.

As public relations professionals, I recommend, no matter how noisy it gets, to check your sources and don’t make choices alone.

When you make a choice alone, you’re putting yourself and your integrity at a risk. At the end of the day, what do you have left? All you have left is your integrity.

Don’t make those choices alone. I had a client a while back who actually went to prison and talks about you should never make choices alone. He violated FCPA and anti-bribery laws. When he was in prison, he read my books, and he came out and he needed a new trajectory. He knew he was now making better decisions and he wanted to educate others. Part of his story he shared was he did make choices alone, and that got him into trouble in Third World countries.

You always want to rely on the smartest people around you. So, within your company, bring it out in the open if there are questions. You can question and give people the opportunity to question with you so that you can all make a sound decision. Sometimes, we go to our outside network of confidants who are in our closest circle. There’s many a time that I reach out to somebody for a gut check.

That helps. It really does, because sometimes you’re in your own bubble and you’re moving so quickly. Everybody can say, “Well, maybe I don’t have time.” But take that two minutes or five minutes, whatever it takes. When reporters are knocking on your door, it’s their job to make you answer quickly. They want you to jump on the phone and lose all sight of everything else. Take the 15 minutes, the 20 minutes, the two hours, whatever it is that you need, so you don’t make a major mistake.

Tim O’Brien, APR, Founder of O’Brien Associates, believes relative ethics can get business and professionals in trouble when it comes to competition.

There’s a mindset in society that ethics are relative.

I was speaking to a group of MBA students recently. It’s very realistic for some of the people in this class to envision themselves starting a business and selling it to Google or Uber or Amazon within the next two or three years.

We were having a conversation about crisis communications in the group, and there were students from around the world. One of the students asked me, “Is it okay to lie?”

It was a loaded question on his part, because he had his mind made up. I said, “No, it’s never okay to lie.” Then he said, “What about other parts of the world, where cultures are different and it’s more acceptable to lie?” I said, “What do you mean by that?” And he said, “Well, what you think is lying here, and what someone else might think is lying in another part of the world, may be two different things.”

One of the examples he used, because I did probe it, was about how you buy things. In other words, if you go in America to a store, you see a price tag on the item and you buy it. When you go to a market somewhere else, you might bargain or negotiate. So, the vendor might tell you a certain price, but that vendor’s always willing to negotiate it.

That was a very simple example. But the student said that way of doing business starts at the local market, but may work its way up into the boardrooms and C-suites too. I didn’t agree with him on that, but that was his point of view.

His theory was that if you don’t tell people what the pros and cons of a product are, or a piece of software, let’s say, then it’s up to the buyer to ask the questions and discover what could be wrong with it.

I said to him, “Well, let me ask you this. If your teacher here tells you you’re going to get an A, and your teacher gives you a C, is that okay?” That stopped him. He said, “Well, no, that’s not okay.” There was a little bit of laughter in the class, because all of a sudden, if the lie affected him, it wasn’t okay.

That subject has come up in other classes and I’ve used that example since. It’s almost universally a reality check for people who might think that something as fundamental as lying could be okay.

At another school, I saw in a syllabus, “It may be unethical to impose your ethics on others.” It was a variation of what this other student said to me, that your ethics are self-determined and are individual to you.

I don’t think ethics are relative. Ethics exists to provide a basis or a foundation. These are standards on which we all can agree. They may not be all the standards, but they are at least the baseline standards on which we all agree are right or wrong. They aren’t relative, and they’re not situational. Because if ethics weren’t standard in some way, then there would be chaos.

The biggest challenge in the world of ethics and in communications is to reject the notion that ethical standards are relative. There shouldn’t be gray areas. There is a difference between right or wrong. That’s one of the things we try to do in PRSA, with the Board of Ethics and Professional Standards. We use our codes of ethics and our codes of conduct as structure to deliver that message.

Scott Monty, a neoclassical digital executive who led Ford’s digital and social media, believes many companies are ethically challenged when it comes to competition.

This has been playing out in the news certainly over the last two years or so. We know about the various platforms that we’ve heard about as far as manipulation of information and even hacking over the course of elections. Facebook looms large in all of this because it is the largest platform out there, but it is also the laxest in its ethical standards. It seems Facebook has, over the course of its short history, been governed by apology. They will put a toe over a certain technical/ethical line, whether it’s invasion of privacy or how they deal with your data. Then, there will be a great big blowback, a collective gasp from the online community and Facebook will say, “Our bad, we’re sorry.” They’ll step back, and yet then, they will creep forward eventually back to that step when they think that the storm has blown over.

That’s a dangerous way to do business because all they’ve done is get called on things and then apologize. It’s very clear that they’re doing quite well as a company and yet they’ve got people who are in almost sweathouse conditions looking through some of the vilest content online. Casey Newton did big expose on this¹ in The Verge about the PTSD that their contractors are going through. The company doesn’t seem to have an empathetic bone in its body. It seems very engineering driven and very dispossessed in understanding the human emotional toll that some of these behaviors are taking.

This is where I come back to the classics. Facebook could have done a lot better if it had more liberal arts folks on staff rather than just engineers at its earliest days. There was no one there who understood sociology and psychology at a deeper level, and who understood what the potential implications might be when this rolled out and how humans have acted over time. The stuff that Facebook is exposing now isn’t new. This is human behavior that’s been embedded in our psyche since time immemorial. It’s just amplifying it.

It was Albert Schweitzer who said, “The first step in the evolution of ethics is a sense of solidarity with other human beings.” This gets back to customer-centricity. If you’re making decisions but you actually aren’t going through the purchase process yourself, if you aren’t experiencing it through a customer’s eyes, if you aren’t feeling the same kind of pain that someone feels when something goes wrong, then you truly aren’t being empathetic in solidarity with other humans.

 

¹ C. Newton. February 25, 2019. “The Trauma Floor,” Verge.