Dez Reads. Crisis Communications, Mergers & Acquisitions, Bullying in Schools, Castaway Rescue, and the Pencil Economy
Welcome to Dez Reads, where we examine interesting trends in business, law, human interest, and more – giving you an insight into what Dez staff is reading, discussing, and debating.
This week, we're examining the benefits and challenges of aggressive crisis comms; the increasing rates of success in M&A; the harsh realities of bullying in schools; a dramatic rescue of three fishermen, leading to an unexpected family reunion in Micronesia; and a K-12 trend in which old fashioned pencils have become a coveted currency among kids, transforming schoolyard trades into a bustling pencil economy.
Each read provides a unique perspective on the challenges and transformations shaping public opinion and our daily media news cycles. Let's dive into this week's stories.
Here we go.
Public Affairs.
Phys. Study suggests taking an aggressive stance in crisis communications costs companies money
A new study by PhD students at North Carolina State University concluded that companies that take aggressive stances in crisis situations fare poorly. I'm not surprised.
I've spent my career as a clinician, not a researcher. All I know is what my experience has taught me: academic studies don't match what I've seen in practice.
Almost every crisis management study is ideologically anti-business. The companies that engage in "happy PR" are beloved, while assertive companies are "bad." This reflects the ethic of university types and assumes that researchers know the extent of what companies did to manage their crises. My observation has been that for every company that plays soft, there have been others that have hit back against their critics and fared well — but they'll never talk about what they did.
Here's where the NCSU study may be onto something: Today, most companies don't believe they can win a viral fight — and they may be right. Furthermore, as the PR industry has swallowed the damage control field, a new and indoctrinated generation populates the field, rendering soft responses the coin of the realm.
Those under attack should pressure-test the true rationale behind the advice they're getting.
– Eric Dezenhall
Business.
Bain & Company. How Companies Got So Good at M&A
Are Successful M&A Deals Back?
Despite the various headlines about successful mergers, the traditional thinking has always been that a sizeable percentage ends up failing or not fulfilling its initial promise. However, a new white paper from Bain & Company indicates that the inverse is now true, and 70 percent of takeovers succeed. Between 2000 and 2010, companies that were frequent acquirers earned 57 percent higher shareholder returns vs. those that stayed out of the market. Today, that advantage is about 130 percent.
The key reasons identified by Bain were:
Broadening the bounds of M&A to include moves outside of your core business.
Better due diligence.
Increasing the frequency of deals and learning from each experience.
Learning that big one-off deals remain risky.
Number four is particularly of interest, especially when factoring in rising bipartisan hostility toward the very concept of M&A in Washington (see: Kraft Heinz & Unilever, JetBlue & Spirit Airlines, Kroger & Albertsons). We may also begin to see more exclusive partnership announcements that achieve similar goals of onboarding intellectual property and technology to an interested company without the increasingly inconvenient need for regulatory approval and scrutiny.
– Mike Bova
Legal.
CBS. Videos show several violent fights at Loch Raven High School; school officials inform parents
Bullying Heads to Court
I have a bias against the perpetual smartphone surveillance that defines our age and has been known to trigger crises. The phenomenon has its good points, however, when it comes to the phenomenon of bullying.
A childhood friend and I were discussing the bullies of our youth (we’ve entered our sixties and still think about it). It was suburban Philadelphia in the 1970s, a very testosterone-y time and place. The Flyers, known as the “Broad Street Bullies” for their ceaseless fisticuffs, were dominating the Stanley Cup playoffs. The Philadelphia Police weren’t so much policing as they were beating people up. Tough-guy mayor Frank Rizzo, a former police chief, dug this. Neighborhood bullies were royalty and were coddled by school administrators.
Lately, my news feeds have turned up multiple instances where students were filmed beating their peers, leading to mortal injuries. The authorities, now armed with evidence, are beginning to criminally charge these beasts, who sometimes supplement physical violence with online attacks. Before they’re caught, many of them convey smirking amusement. I hope the omnipresence of smartphones will finally lead to something good. RIP Preston Lord.
– Eric Dezenhall
Good Reads / Human Interest.
CNN. Pacific castaways’ ‘HELP’ sign sparks US rescue mission – and an unexpected family reunion
The human brain is biologically hardwired to focus on the negative, but this week, I’m actively working against that instinct and reveling in a good news story from the waters around the very remote Pikelot Island that’s part of Micronesia.
This week, three fishermen were rescued from a 31-acre uninhabited island after their boat was damaged by massive waves. With no battery power for their radio and no power for their vessel, the fishermen spelled out HELP in palm fronds on the beach while they subsisted on coconut meat and whatever water sources they could find on the island.
Fortunately for the castaways, a US Navy jet based out of Japan spotted their beachside message, and a rescue mission was launched by the US Coast Guard. The rescue turned out to also be a family reunion, as one of the Coast Guard officials first on the beach was Micronesian and a distant cousin of one of the fishermen.
– Anne Marie Malecha
WSJ. Hot Market for Pencils Helps Kids Turn Lead Into Gold.
The Journal has a trend piece on the rising value of lead pencils among schoolkids, and this one checks a lot of boxes for me. A sober-minded WSJ profile consisting of interviews with cheeky seven-year-olds; a trend piece suggesting the kids are second-guessing the all-digital future; and an examination of how markets form around even the most trivial commodities.
I checked with my kids, and it’s true – two girls in my daughter’s third-grade class last year set up a “business” at recess, in which they served as a sort of trading desk for pencils of all shapes and sizes. My son chimed in to inform me of the price premium on “smencils,” which are basically mechanical pencils that are scented.
America is always innovating, even in the analog pencil market. And kids, like their parents, are always willing to make a trade where they see a rational exchange of value.
– Josh Culling
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