Friday Wrap-Up: “Scott Merely Made Himself Look Foolish”
For Immediate Release
Friday, October 28, 2005
Washington, D.C., October 28, 2005 – A public relations industry newsletter, PR Fuel, commented on Wal-Mart's increasingly desperate attempts to garner positive PR. The millions of dollars Wal-Mart is paying to high-powered PR firms seem to be providing them little in return. CEO Lee Scott's idiosyncratic support for a higher minimum wage – ridiculed by critics on the political right and left – coupled with the fallout from the internal memo leaked by Wal-Mart Watch have been the most recent gaffes on the part of Wal-Mart's public relations team. And that was all just this week.
Below are excerpts from the story:
Rarely a day goes by when Wal-Mart, the world's largest retailer, doesn't drum up some kind of press. Last month, the company was being showered with praise for its relief work in the aftermath of Hurricane Katrina. (Business Week reports that PR giant Edelman helped Wal-Mart drum up positive press from bloggers, which translated into mainstream media coverage.) With a positive glow surrounding the company for the first time in a long time, Wal-Mart CEO Lee Scott decided publicly to back a higher federal minimum wage (Wal-Mart often comes under fire for not paying its employees much) and a new health care scheme for employees. (Again, Wal-Mart often comes under fire for having a poor benefits package, unlike rival Costco.) For a moment, it seemed that Wal-Mart was going to get nothing but good press for two weeks in a row. And then it happened.
Yesterday, a story in The New York Times reported that in a memo to the company's board, a Wal-Mart executive suggested that the company lower its health care costs by hiring more part-time employees (most of whom are not eligible for benefits) and "healthier, more productive employees." The memo has been widely criticized, with Wal-Mart bashers saying Scott's stance on the minimum wage is "laughable" in light of what others in the company are saying. While it's often difficult to draw comparisons between Wal-Mart and any company, in this situation it's not so hard.
First, the leaked memo proves that Wal-Mart has an internal security problem. More often than not, leaks come from disgruntled employees and are designed to embarrass a company. Believe me, I once made a living off of leaked internal documents. This is a problem that could plague any company or organization, and one that is increasingly difficult to battle due to electronic communications. PR people need to play a leading role in informing the workforce that leaks are destructive, lower morale and do little good. Remember, internal PR is just as important as external PR.
Second, Scott's stance on minimum wage is certainly an about-face, and rightfully was greeted skeptically. Scott did not do a very good job of explaining his ideas, or talking about how Wal-Mart is helping to lift the standard of living of American workers. (The company can argue that it does so with its low prices, but employees would no doubt argue otherwise.) When it comes down to brass tacks, Scott's comments on minimum wage are akin to a gun manufacturer pushing for gun controls. Said another way, no one is buying.
It's important that people who speak publicly on behalf of a company maintain a consistent message, and Scott certainly went off message. While his intentions may have been honorable, there is too much evidence that suggests Wal-Mart cares little about minimum wage earners, and cares more about its bottom line. By going off message, Scott merely made himself look foolish.
Read the article here.
