Can this reputation be saved?

Wal-Mart

The short answer:
Nope, not even if they mark the price down 60%.

When I started to hear Wal-Mart's underwriting credits on NPR I wasn't sure whether to laugh or cry. NPR listeners are invariably high income, highly educated, liberal-leaning intelligentsia -- so I couldn't figure out why an emporium that caters to the lowest common denominator of price shoppers would suddenly be reaching out to this snootiest of demographics.

Then I started reading about Wal-Mart's efforts to improve their reputation in local and national media and realized that the organization has finally awakened to the reality of Public Relations -- as in relating to all of their publics.

The cheap and annoying advertising that has plagued the airwaves for years is clearly no longer enough to ensure that the world's largest employer continues to reap enormous profits. (Wal-Mart is said to account for 8% of retail sales in the U.S.) They have apparently realized that if they want to continue to add stores without being refused by angry voter, hire cheap labor without being investigated by employee rights groups, and strong-arm their suppliers without being regulated to death by congress persons they better do something about their reputation.

They certainly are doing their best to buy good PR, but there's no real evidence that it's paying off. They recently spent $84,500 on Arizona voters to persuade them to allow a super center to be built, but, as of this writing, the plan was still being fought by neighborhood groups. In California they spent even more money trying to win the hearts and minds of Glendale voters who nonetheless overwhelmingly rejected a proposed super center.

(Ironically, if you Google "Wal-Mart and Public Relations" you are directed to their book store which has an absolutely fabulous list of books by some of the best read, most widely-respected practitioners and professors in the field of PR. Perhaps, had senior management spent more of the last decade reading the books they offer for sale and less gloating over their profits, they might not have gotten into this jam.)

I was fortunate to have met members of the Walton family at a gathering of socially responsible entrepreneurs back in the late 80's, and I was impressed with what they wanted to do with their foundation and their wealth. They clearly had good social consciences. Those sons and daughters of Sam are clearly not the ones running the company today. Whoever has been at the helm in recent years has had no familiarity with the concept of corporate social responsibility, at least not until its negative side jumped up and bit them in the pocketbook.

I've argued long and hard that to be seen in communities and by the media as "the corporate neighbor of choice" and "a good community citizen" is worth real dollars in lower legal costs and streamlined permitting systems. I guess Wal-Mart must have finally listened, since they are now courting the media and local communities with the enthusiasm of Petruchio pursuing the wealthy Kate in The Taming of the Shrew. Sunny stories of happy employees are showing up in local newspapers all over the country, and Wal-Mart's underwriting credits appear on nearly every NPR program all week long.

The problem is that reputation takes years to build and moments to destroy. And Wal-Mart has definitely not been trying to enhance its "warm and fuzzies" until very recently. In fact, most of its policies make very clear its priorities. The company's pay scale and hard-nosed labor practices mean that "Wal-Mart is certainly a template of 21st-century capitalism, but a capitalism that increasingly resembles a capitalism of 100 years ago," said Simon Head, a fellow at the Century Foundation and author of The New Ruthless Economy: Work and Power in the Digital Age (Oxford University Press, 2003). He added, "It combines the extremely dynamic use of technology with a very authoritarian and ruthless managerial culture."

To counter this criticism, Wal-Mart has launched a massive PR offense with dozens of company spokespeople swarming the offices of local media and community groups with the message that Wal-Mart offers better-paying jobs with better benefits than most retailers, that Wal-Mart does not hurt other businesses in a community, and that Wal-Mart hasn't decimated small-town America.

So will this PR offensive work? We think it's unlikely. Obvious pandering to the media is almost always met with skepticism, and so reporters are unlikely to buy the company line. Nor will the media buy company lines that are obviously "spin" and don't match up with the facts. (Well, maybe with the exception of the White House press corps.)

I'm sure many NPR fans are grateful that the company is underwriting NPR, but does that make them less likely to take to the streets when Wal-Mart wants to invade their community? I doubt it. So our conclusion is that this PR blitz is too little, too late and too obviously spin-driven to be truly effective. Unfortunately, I think it likely that when the bean counters in Little Rock scrutinize the results, PR at Wal-Mart will once again be allocated to the back burner -- where it's been sitting for three decades.

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