Friday, January 06, 2006

Image Matters--Inside and Out

To say Wal-Mart had a
rough 2005 may be the understatement of 2006. In the
course of last year, the retailer was the poster child
for public relations suicide. Among the gaffes . . .

  • It ran a newspaper ad that equated a proposed
    state zoning ordinance in Arizona with Nazi
    book-burning -- hyperbole for which it had to

  • Robert Greenwald's documentary "The High Cost of
    Low Price" was a box office hit, skewering Wal-Mart's
    treatment of its employees.

  • The press had a field day when an internal
    Wal-Mart memo was exposed that suggested the company
    could save money by forcing more employees into
    part-time work without benefits and discriminating
    against the unhealthy and disabled.

  • Questions arose over a suspicious sweetheart deal
    Wal-Mart struck with Bush's Labor Department over
    panoply of child-labor law violations.
The list
goes on an on. Indeed, in the last month of 2005,
Wal-Mart revealed that it is the target of an ongoing
federal criminal probe over the company's handling of
hazardous waste, this on the heels of a California jury
awarding $172 million to former workers who were not
given meal breaks as required by California

Wal-Mart's sales in 2005 were tepid. Its
stock was down nearly 20% and is trading near an
all-time low profits-to-earnings ratio. It is also
facing the largest ever U.S. class-action lawsuit
alleging that the company discriminates against women in
pay and promotions.

One might assume that
Wal-Mart learned a bitter but valuable lesson about the
importance of public image, but one might be

Wal-Mart began 2006 with a bang,
apologizing yesterday for its web site at which, if you
order a DVD of either "Charlie and the Chocolate
Factory" or "Planet of the Apes," you are asked to
consider purchasing other DVDs with "African American

Wal-Mart's response? "It's just simply
not working correctly."

No kidding. And neither
is the public relations department who, admittedly, has
not had a lot to work with. Of course, it is important
to add that much of what is been alleged against
Wal-Mart is just that -- allegation, but the impact of
bad public relations is not speculative. It is costly
and long-term and it begins (and ends) with a general
public who buys (or decides not to buy), which affects
shareholders who invest (or push the sell button), and
employees who either believe their company is doing the
right thing or they do not and make their career
decisions accordingly.

Success in the circle of
consumer, shareholder, and employee is more than a
matter of not violating the law and staying out of the
press. Today's best companies pay a living wage, provide
reasonable benefits, train their managers not only in
compliance with the law but in doing the right thing, in
understanding the difference between a human resource
and a human being. They connect through their employees
to their communities, charities, and environment and
they involve their employees in those

Companies that enjoy a good public image
don't happen upon it. They make it happen.