Whole problems from half measures

August 20, 2014

A terrific scene in the movie Hoosiers takes place when one of Gene Hackman’s players fouls out of the game. Rather than replace the player with the team member being disciplined on the bench, Hackman tells the ref, “My team’s on the floor.” The camera cuts to a shot of Dennis Hopper in the stands, marveling at Hackman’s commitment to his principles.

I marveled in the same way when I read BlackFish director Gabriela Cowperthwaite’s response to SeaWorld’s plan to double the size of its killer whale habitats. Rather than give SeaWorld relief from the relentless assault on its brand, Cowperthwaite said, “ … [T]he problem is, instead of changing their business model, they’re doubling down.”

Activist groups are driven by their cause. While a corporate shakedown is often the ultimate objective, activists are true believers who will never be satisfied by half measures. Corporations must understand that you cannot appease activist groups with partial concessions or by agreeing to just some demands. These compromises only project weakness and telegraph to activist groups that victory is in sight.

If an activist campaign has reached the point that it’s receiving national attention and cutting into sales, you’ve got only two choices to make it stop: 1) Agree to the group’s demands, or 2) Give them power and invite them as partners into your reform process. As PETA said in their statement about SeaWorld’s new plans, “A bigger prison is still a prison.”

A very contentious and costly dispute

August 14, 2014

Yesterday marked a big win for activists, and even the very threat of activism. Shares of SeaWorld Entertainment fell 30 percent after the company reported disappointing results. SeaWorld gave a straightforward explanation for slumping park attendance: the controversy generated by the film Blackfish. As a public relations professional, I admire an activist campaign that can shave $750 million off a company’s market cap.

But how much is SeaWorld to blame for its own predicament? Activists want you to engage them in a very contentious and public dispute. The publicity creates awareness for the activists’ cause, and a downward spiral of business distractions and diverted resources for the company.

If your company’s business model is incompatible with an activist group’s demands – as in SeaWorld’s case – the only workable strategy is to de-escalate the conflict. Your message to every audience – press, public, customers – is that we care, we agree, and we are interested in working toward the best solution. If all parties appear to be working together, the agitation loses its purpose.

So how did SeaWorld do? According to the Wall Street Journal, SeaWorld has called Blackfish “propaganda” pushed by “animal-rights extremists,” and even launched a website in 2014 titled “Truth About Blackfish” to dispute the film. And what did all this defensiveness and name-calling get SeaWorld? Here’s a 5-day snapshot of the company’s stock price:

SeaWorld stock price

Coordination between government and activists

April 4, 2014

I mention in my book how well-connected activist groups can encourage legislators to call hearings and subpoena company leaders as a way of ratcheting up pressure and executive pain. I came across a couple more examples recently of activists and government joining forces.

According to this article, a change in OSHA rules in 2013 is enabling union agents to tag along on OSHA inspections at non-union businesses. When union agents arrive alongside government inspectors, the agents appear to workers to hold positions of authority, gain insider access to company operations, and rattle the nerves of company executives. Moreover, the rule change enables unions to “use the threat of federal inspections against any business that refuses to bend to their wishes.”

Proposed legislation can also be a powerful weapon. In the case of SeaWorld’s ongoing conflict with the makers of Blackfish, a state lawmaker in California has has proposed a bill that would ban SeaWorld from using killer whales in shows at its San Diego theme park. While actual passage of the bill is in doubt, the fresh round of publicity generated by the proposal is itself enough to further damage SeaWorld’s brand.