How Julie Roehm Should Exact Revenge Against Wal-Mart
I know what it feels like to be wronged in the workplace and have images of legal retribution raging in your head. The incident happened many years ago, but my level-headed lawyer convinced me that "living well is the best revenge."
So I have more than just a passing interest in the plight of Julie Roehm, the advertising executive who Wal-Mart fired for allegedly violating the company’s ethics rules. Roehm, too, feels she was wronged. But her preferred mode of revenge is the biblical kind, albeit with a twist: an eye for an eye, and a smear for a smear. Roehm isn't just suing Wal-Mart for fraud and breach of contract -- she also has accused the company’s biggest honchos, including CEO H. Lee Scott, of ethical conflicts. Underscoring her determination, Roehm has retained Michael“The flack when you are under attack” Sitrick. Pitting Sitrick against Wal-Mart’s army of PR pros is the equivalent of hiring Robocop to take on The Three Stooges.
Given her nemesis, I instinctively want to side with Roehm. Wal-Mart is a company without a soul: It pays paltry wages and offers crummy health benefits, leaving a disproportionate percentage of its workers dependent on some form of government financial assistance. It takes great delight shaking down vendors ("Don't ever feel sorry for a vendor" goes the company saying). It gets huge tax breaks and incentives to build its stores and then shutters them to build a bigger one down the road. Its sleazy PR tactics include the "Wal-Marting Across America" blog, supposedly penned by a couple of customer enthusiasts who turned out to have been bought and paid for by the company. (Yeah, I know the scam was Edelman's handiwork, but Wal-Mart’s PR people likely were in on the deception). I’m not inclined to believe anything Wal-Mart says, particularly if it involves a fired employee.
Yet as much as I want to believe in Roehm, a careful reading of her public comments and her court filings requires a dishonest leap of faith. Wal-Mart is quite explicit about prohibiting employees from accepting as much as a cup of instant coffee from vendors and potential vendors; this is an admirable and necessary policy for a company that actively does business in developing countries where bribery and corruption are rampant. So what was Roehm doing dining at New York's trendy and expensive Nobu restaurant as the guest of the advertising agency she would eventually endorse (much less sitting on the lap of one of the ad execs)?
Roehm admits to the Nobu dinner -- “Yes, Nobu! God, we went to Nobu!” – but insists she expected the advertising agency to bill her for the dinner. I’m troubled by this defense: Roehm essentially was relying on the good faith of a potential vendor to ensure compliance of Wal-Mart’s conflict-of-interest rules. My guess is that Wal-Mart’s bean counters would never have approved the Nobu dinner; by having the dinner billed back, the cost would likely have been buried in an invoice that Roehm herself might have had the authority to sign. Given that ad agencies typically mark up expenses, asking the advertising agency to bill back the dinner is fiscally irresponsible at a company that works on razor thin margins.
Fortunately for Roehm, the facts no longer matter with Sitrick as her PR bodyguard. Sitrick’s P.T. Barnum-esque "there's a sucker born every minute" approach to media relations has been unbelievably successful. The infomercial he got 60 Minutes to do articulating his campaign against hedge funds who shorted the stocks of his clients is unquestionably one of the greatest media placements of all time. Just wait until Sitrick unleashes his “truth squads” on Wal-Mart. Don’t be surprised if Roehm remerges as a selfless whistleblower in the spirit of Enron’s Sherron Watkins (Watkins wasn’t a whistleblower either but the media portrayed her as one).
So here is my unsolicited PR advice to Roehm. Drop your lawsuit, admit and learn from your mistakes, and get on with your life. Some of our nation's most respected executives suffered the indignity of being fired or forced out of some very high profile jobs including Lee Iacocca, Sandy Weill, Jamie Dimon, and John Mack. They proved their mettle not by suing their former bosses, but going out and successfully competing against them.
Julie, trust me on this one – living well really is the best revenge.
Eric Starkman is President of Starkman & Associates, a full service public and investor relations firm based in New York City. Prior to a career in PR, he was a journalist with several major newspapers in the U.S. and Canada. The firm has a strong crisis communications practice, having worked with numerous organizations and high-profile individuals to manage and mitigate the reputational damage of real and perceived communications crises.
The top story this week: Wal-Mart and Edelman are inextricably linked.
It may seem like Edelman and Wal-Mart are the top stories every week but several events brought them into focus, in my mind at least, and now the future of each seems very much dependent on the actions of the other.
BusinessWeek’s cover story on Wal-Mart’s deep financial woes was disturbing and apocalyptic. For the first time I can recall there is serous discussion of Wal-Mart’s untenable business model. A lot can be forgiven if a company is “creating shareholder value” – meaning its stock price is rising – but that hasn’t been happening. The stock has been “dead money” for the last five years as the U.S. stock market has been booming and Wall Street is becoming very impatient with the current course of the company. Consensus: A radical change is needed to right this listing ship.
Top urgent task: Wal-Mart needs to cut down on the dozens of nasty, polarizing battles it is constantly enmeshed in with cities, municipalities, and its own customers and employees across America and, increasingly, the world. BusinessWeek’s online “Debate Room” features the topic: “Stop The Bullying, Wal-Mart” – rife with dozens of complaints about the company from all quarters. This deep rooted dissatisfaction is not fabrication of Wal-Mart enemies, as they would have you believe. It is real, and it cannot be blunted with bare knuckle PR and armies of lawyers and lobbyists.
Fight to grow
It is Wal-Mart’s DNA to be in fight mode. The company’s corporate structure and operational support are built for polarization, confrontation, and overwhelming force to get its way. Urban areas, such as New York, Los Angeles and the San Francisco Bay area, have the resources and union backing to push back on the relentless Wal-Mart growth machine. Chicago politics will never be the same due to recent nasty internecine battles fought over Wal-Mart’s entry into the city. Rural areas, desperate for tax revenue and jobs, no matter how low-level, don’t stand a chance.
Wal-Mart is not just another big company. It is the country's largest private employer and the largest in the world, with 1.8 million employees. At January 31, 2006, the Company operated 1,209 Discount Stores, 1,980 Supercenters, 567 SAM'S CLUBs and 100 Neighborhood Markets in the United States. And growth plans are ambitious: In the near term, Wal-Mart intends to open a new store every day. Think about that. Another day, another Wal-Mart. Another day, another Wal-Mart. No other store has such deep impact on America’s local economies, culture, political balance, and sociology. Another day, another Wal-Mart.
PR feeds the machine
According to The New Yorker, Wal-Mart pays Edelman $10 million a year for public relations that includes operating the fabled “war room” in a bunker-like setting in Bentonville, Arkansas. Edelman is deeply enmeshed with Wal-Mart. Leslie Dach, Democratic party operative and long-time head of Edelman’s Washington DC office, joined Wal-Mart last year to report directly to CEO Lee Scott. We all know about Edelman’s botched blogging campaign for Wal-Mart.
So, when I interviewed Richard Edelman on April 3 for PRBlogNews, I threw in a Wal-Mart related softball question in which he could atone for past sins and demonstrate how we are all just neighbors online, even the big smiley faced retailer. He chose instead to praise a “blog” to demonstrate Edelman’s “new media” work for the company. The Q & A follows:
PRBlogNews: Edelman overshadowed its clients Wal-Mart and Microsoft when its blog practices were questioned prominently in mainstream media. What lessons did you learn from that experience?
Richard Edelman: “I am proud of our blogging work on behalf of Wal-Mart and Microsoft. In fact, Wal-MartFacts.com has been a terrific contributor to the knowledge about the company, with 150,000 people going each week to the site to learn about environment, health and other aspects of the company.”
“Um . . . Richard, Walmartfacts.com is not a blog. Indeed, even the one blog available on Walmartfacts.com, Life at Wal-Mart, is not really a blog. Posts are infrequent. There are no comments enabled and it sure looks like they just print positive letters from whoever the heck sends Wal-Mart one.
“Yet what I find most interesting about this answer is that Edelman completely leaves out Working Families for Wal-Mart. While not a real blog either, its homepage is at least in bloggy format.”
Propaganda for the masses
I checked it out. It’s true, walmartfacts.com is not a blog and it can only technically be called a web site. A more accurate definition might be an ultra SEO-enhanced propaganda vehicle that no self respecting journalist or self-loathing blogger would believe. Walmartfacts.com is a mish-mash repository of feel good, glossed over postulations and carefully crafted ‘facts’ of a company that apparently does not have any interest in engagement with the public through the web.
Richard, is that the best of example of an Edelman ‘conversation’ you can offer? Say it ain’t so. WalMartfacts.com exists to reinforce the bunker mentality of Bentonville and to prop up a regime that exists in a delusional state of omnipotence and self-righteousness, like the current White House administration.
New York rejects Wal-Mart
Richard, since we both live in New York City let’s examine the issue close to home. Wal-Mart recently gave up on coming into New York City because our Comptroller was more than a little upset by the company’s spying on its shareholders (the City holds shares in Wal-Mart). It was also made clear that New Yorkers demand a living wage and decent benefits for workers. Can’t have that, can we? Wal-Mart CEO Lee Scott said this fight “wasn’t worth it.” We can mark that as a clear victory for the people of New York.
Wal-Mart mistakenly believes that these skirmishes are merely “site fights.” There is a larger pattern here they need to recognize, because it apparently deeply impacts the bottom line. Put the money they waste on site fights into education, job training, fair wages and benefits, and site fights shrink, goodwill increases, employees feel like associates again, customers feel good about shopping there, municipal governments ratchet down the battles with their own constituents. Isn’t building goodwill and good community relations what grassroots PR is all about?
Yes, that means Wal-Mart would have to raise prices but they’re smart people, they’ll find a way to make it work. And then maybe Wal-Mart would not be so scared of what the citizenry really thinks and they will put up a blog that supports the conversation and is open to comments.
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Mark Rose is President of CommTech, Inc., a firm specializing in PR 2.0 strategies. Rose has more than 15 years experience with some of New York's City’s best known public relations firms including Marston Corporate Communications, Howard J. Rubenstein Associates, and Edelman Worldwide. As a journalist his work has appeared in The New York Times, Los Angeles Times and other national publications. Currently, Mark is editor of PRBlogNews, a web publication focusing on public relations practices in the digital age.
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