PR pro Shel Holtz has had it. He writes that the people running AIG are idiots. Dolts. Complete and irredeemable morons.
And I agree.
First, some background. In September, the Treasury promised insurance giant AIG some $85 billion in credit to keep the company afloat. In October, AIG got another $38 billion. By Monday, that may increase by another $40 billion. Total tab to you and me: $150 billion.
So what has this “confederacy of dunces” (Holtz’s words) done with our money?
The company put the former head of its financial products unit, Joseph J. Cassano, on retainer. His salary? One million dollars a month. Former CEO Martin J. Sullivan, who ran the company into the ground, got a $5 million “performance bonus.”
In October, just days after receiving the first bailout, the company spent $443,000 on an executive retreat in Half Moon Bay, California. Reaction to this event has been negative. And bipartisan. Barack Obama said the executives should be fired. George W. Bush’s press secretary, Dana Perino, said AIG’s behavior was “pretty despicable.”
And now, ABC News’ Brian Ross reports another lavish AIG resort getaway in Phoenix, this time only about one-third of a million dollars’ worth. The most damning thing Ross presents is that the hotel staff was instructed to keep the so-called educational seminar quiet. No “Welcome AIG” signs here. The ostensible goal: to keep AIG out of the news.
The key values that need to be addressed here are honesty and transparency. If AIG is going to be a quasi-public company, it needs to do business in an honest manner. You don’t need to be a genius to know this: good performance begats good PR. It’s easy to tell your story when you’ve nothing to hide.
If you’re going to sell high-end financial products to financial analysts, a luxury resort may be in order. But lying about it – failing to disclose publicly that it’s your event – is wrong. It breeds mistrust. It hurts the company, both long- and short-term.
AIG needs to entirely reboot its communications process.
The company needs to operate in the sunshine. The company should hire – at the highest level – an ombudsman to represent its public ownership. This person would have to train the executives to operate under this new paradigm, and should have unfettered access to daily activities. This new approach would have to be practiced at every level of the company.
The company should publish its aggressive plans to pay back our $150 billion. It needs to proactively tell the story of its good stewardship of our money. It needs to show gratitude.
All across America, people are losing their jobs and companies are closing their doors. We’re hurting. AIG needs to hurt, too. Its guests may enjoy the resort, but AIG employees need to sleep at the Ramada. Salaries need to be reined in and made public. Bonuses, which may be necessary to attract some top talent, need to be linked to actual long-term high performance, and they need to be deferred.
AIG has created a big hole to climb out of. We’re provided a ladder. We should be cheering for their success. It’s not such a far-fetched concept.
Remember when Lee Iacocca became the voice of Chrysler after receiving a Federal bailout?
He gave a bravura performance as the conscience, the brains, the drive of the New Chrysler.
AIG needs its own Iacocca: someone to to talk to us, reassure us, and show the company’s relentless effort to repay us for our faith in the company. This individual should probably be an outsider, someone with a stellar reputation, probably from a service industry. Perhaps a respected legislator or judge.
The message needs to be, “no more business as usual at AIG. We’re a new company with a new set of rules, and all that bad behavior is in the past.”
And then they have to do the work.
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How can AIG mend its image? What can the company do to better tell its story?
Resources for discussion:
AIG website (includes video links of CEO Edward Liddy and a statement on the meeting in Phoenix)
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