Watch Your Mouth: Allstate Executive Fired for Talking Trash about Boss

No one has a perfect boss. You might feel your boss is incompetent or you might at any given time disagree strongly with a decision your boss has made. Some of us bite our tongues, confide and rant with a fellow co-worker who sympathizes, or take the chance of respectfully presenting your boss/employer with valid reasons behind the disagreement. But it is not smart to vulgarly rant about a boss in a bar, in front of many executives/co-workers, in the midst of a company event. The result could be you’re fired.  “Loose Lips Trip Up Good Hands Executive” by Erik Holm and Joann S. Lublin of WSJ.com report that Joseph Lacher, formerly of Allstate, was fired from the insurer for committing this ultimate workplace indiscretion.

Lacher was president of Allstate home and auto insurance units and on July 18 the company surprisingly reported his exit. Those familiar with the company were aware that Thomas J. Wilson, the chief executive, was not pleased with Lacher’s performance. But the article is reporting “several people familiar with the situation” are divulging that Lacher was fired for referring to his boss in a vulgar manner. The incident:

“[Lacher] was having drinks with some of Allstate’s top-selling insurance agents as part of a company event called the Leaders Forum…earlier in the day… Messrs. Lacher and Wilson unveiled plans to shrink Allstate’s sales force and change the way the insurer calculates commission.

Some agents were angry about the changes… Mr. Wilson, who wasn’t at the bar, was a popular target.

Then came the two words that helped end Mr. Lacher’s 20-month career at Allstate: ‘f—cking a—‘”

Bad Publicity is Good Publicity? A Study Says Maybe

In light of the Charlie Sheen fiasco in the news, I thought BrandMakerNews.com post on bad publicity was inspired by it. It turns out their article was a repost of “Better to be reviled than ignored” by the Economist. The article begins with examples of bad publicity for well-established entities that barely bounced back from it. But Alan Sorensen, an economics professor, did a study looking at the New York Times book reviews and the effect on sales. The results:

“…well-known authors who earned glowing reviews for a new book could expect to sell 42% more copies, whereas a negative review caused sales to drop by 15%. For unknown authors, however, it did not matter whether a book was panned or lauded. Simply being reviewed in the Times bumped up sales by a third”

The study concluded that unknown brands benefit from bad publicity because the name is out and bad publicity won’t be remembered considering the brand isn’t well known. Simply put, consumers only remember the publicity. The article gave an example: Kazahstan whose tourism went up even after it was ridiculed on “Borat”. The article also gave an antithesis example: Vitaly Borker, the online eyeglass seller who purposely provided bad service to increase his online complaints and thus boast his Google search ranking. He was exposed after gloating about his strategy to the New York Times (I wrote about the article in “The Definition of Anti-Salesmanship”). He was eventually arrested for harassment and Google dropped his rank.

Why Let Charlie Sheen End It for Others?

By now the world is aware of Charlie Sheen’s antics causing “Two and a Half Men” to be canceled. There have been many responses from the business media, from aspects of the millions that will be lost from the cancellation, the hypocrisy of letting Sheen stay hired for so long despite his many problems throughout the years ("Insulting Chuck Lorre, Not Abuse, Gets Sheen Sidelined" by David Carr), and the psychology of the reasons people get themselves fired (“Why Do Smart People Do Dumb Things?” by Anne Fisher). I did not write about the blowup because I didn’t know exactly what Sheen said and also it is a known fact that he is an addict either on drugs or alcohol. Let me say that if Sheen is still dealing with demons, I wish him a strong recovery. I am writing about this because my first reaction: Why cancel the show because of Sheen?

I don’t work in Hollywood but I can remember a good amount of shows that have replaced cast members. The cancellation of the show means the loss of jobs. I am angry that one person’s actions spreads the consequences to people not involved in the action. I don’t watch the show but it has been running for many years and has been a success for all who are on the show, on the set and off. I certainly understand the reasons to fire Sheen. After all, can any one of us publicly insult and threaten our boss and still keep our job? No. No one has that much power in his or her position unless you are your own boss. Thus, firing him came as no surprise. Sheen’s actions are foolish and for him to be surprised at this firing surprises me.

So, the business point of this post is sometimes people in your business or job can mess things up for everyone. The result should not be to punish every one including those not involved in the disagreeable action. When the troubled person is someone who has repeatedly shown signs that they will go further with their antics, there should be a plan to handle their eventual firing.

Overstock.com Caught Gaming Google and Gets Punished

Overstock.com broke some Google rules and they must pay with search rankings. “Google Penalizes Overstock for Search Tactics” by Amir Efrati reports that Overstock.com has dropped in rank for most “common searches”. About two weeks ago, I read a New York Times article “Search Optimization and Its Dirty Little Secrets” by David Segal about JCPenney also having broken policies concerning natural search rankings. According to that article and this one, Google has a strict policy concerning search rankings. Part of the science of search rankings is the amount of links to a website which exist. Specifically, links using certain phrases such as “dresses”, “sunglasses”, etc. The more links back to your website, the higher the site ranks for those phrases.

The offense arises when links are unnaturally created. In JCPenney’s case, they were accused to overloading links on “empty” or irrelevant sites. Thus, when certain shopping terms/ phrases were searched, JCPenney was #1. When Google found out, they reconfigured their algorithm and also “manually” punished the company. According to the article, “On Feb.1, the average Penny position for 59 search terms was 1.3. On Feb.8 when the algorithm was changing, it was 4. By Feb. 10, it was 52.”

Overstock.com’s offense is “the retailer offered discounts of 10% on some merchandise to students and faculty. In exchange, it asked college and university websites to embed links for certain keywords like ‘bunk beds’ or ‘gift baskets’ to Overstock product pages”. The consequence was they went from amongst the top 3 to ranking between 40 and 70. Overstock’s response is that they will work hard to stay within guidelines and Google hasn’t given too much information or insulted the website.

Johnson & Johnson: Recalls Do Not Help

What’s going on with Johnson & Johnson? The other day I found out another J&J product, Rolaids, is being recalled. The first thought in my head was “Again?”. According Parija Kavilanz of cnnmoney.com, “13 million packages of various Rolaid medicines following consumer complaints of foreign materials, including metal and wood particles” were recalled. The response from J&J McNeil division is that it's a third party issue. Days before the recall, Kavilanz wrote another article stating the FDA warned J&J to get their act together and still found more violations.

At this point, I do not care if it is Johnson & Johnson or their third party affiliates who are feeding the problem. The heart of the matter is Johnson & Johnson is the face of the problem and therefore, this is their problem. Considering the power and established brand of the company, J&J needs to do a better job to control their recall situation. It seems the FDA, congressional hearings, and consistent bad press is not enough for the company to act better. Stating the problem as due to a third party sounds like an excuse. It could be true but unfortunately, the string of recalls has now rebranded J&J an untrustworthy company. 

AT&T + iPhone = The Worst Carrier

AT&T is now the worst carrier. Or, so Consumer Reports says. Today, I was informed so by the article of the same leading sentence from cnnmoney.com.  Almost half of the AT&T subscribers surveyed are iPhone users. Most of them stated the most dissatisfaction. This being sad news considering the mobile carrier gains “2.6 million wireless customers last quarter, half of whom were new iPhone customers”.

What I fail to understand is why AT&T did not come out on top considering the near perfect conditions? While all companies were preparing for touch screen phones, Apple was the first to premiere their iPhone, to great fanfare. This grand premiere was exclusively granted to AT&T followed by the next models and the new iPhone 4. The article stated about 6 million AT&T subscribers are iPhone users. 6 million new customers, within the last three years, all because AT&T had the iPhone. So what does AT&T do with exclusive rights and millions of new customers? They provide mediocre service. Their service fails to match up with the technology of the iPhone. Thus, their biggest critic becomes these users.

AT&T’s Response:

"We take this seriously and we continually look for new ways to improve the customer experience," said Fletcher Cook, spokesman for AT&T.

It might be too late. It might be three years and millions of angry iPhone users too late. In 2011, in a few months, Verizon will sell the iPhone. While AT&T iPhone customers defect and Verizon gains new subscribers, the rest of the cell phone industry and customers will scratch their head wondering the reasons AT&T failed on a great opportunity.

The Kardashians Killed the Kard

The Kardashian sisters have found some sense. After criticism from financial experts and Attorney General Blumenthal (CT) that the Kard was a trap for teens to enter financial ruin, the Kardashians killed the Kard. According to Blake Ellis (report here) from Cnnmoney.com:

"On Monday, the Kardashian family's attorney sent a notice of termination to the banks and licensing companies responsible for the card, saying the 'negative spotlight...threatens everything for which they have worked.'"

The good news is the Kardashians are done with the venture. The bad news : (1) The little reward for the risk may have been the reason; according to Ellis, only 250 Kards were purchased (2) the sisters were willing to risk their reputation to cash in on charging kids when they decided to back the venture a month ago. According to Ellis, the card could be and was marketed for teens as young as 13. It was almost $100 just to own, not including repetitive fees for transactions which are free under a bank issued debit card.

The worse part about the card was having the lavish and rich Kardashians backing it as if to say “here kids, here is the means to dress, spend like us and live our lifestyle, at the same time, having us charge you to do it so we can continue to spend lavishly”. I admit I’m coming down kind of hard on the sisters but charging adults is a little sly and doing so to kids is thievery. If the Kardashian sisters want to continue their brand, they have to think better about their decisions. I am glad they made the decision to pull the card instead of continuing to back it, defend it, and sell it. In the end, the sisters are not stupid but this serious business venture has left me thinking the sisters lack business savvy or at least business common sense. Unlike major corporations, they are in the public eye and known by name. They don't have a major entity to take the criticism the way a major bank does. 

The Definition of Anti-Salesmanship

Have you read New York Times article “A Bully Finds a Pulpit on the Web” by David Segel? Please read this article. PLEASE. I read a shocking 8-page exposé on negative customer service and the loopholes that allow incredibly appalling service to exist. That’s right, I said appalling. As in… disgusted, sickened, angry, hostile and so many other words that cannot be expressed.

Every person has at least one bad customer service experience. Some vary from small to incredible. I have never read customer service as bad as Segel reported. Vitaly Borker runs Decormyeyes.com. The company sells eyeglasses and, simply put, they provide horrible service. The service is followed by verbal and sexual harassment and physical threats against customers who dare to dispute charges or complain personally to the company. There is a whole lot more but it would take too much time to detail the article. According to the article, Decormyeyes.com is featured on plenty of message boards and customer service sites like getsatisfaction.com and has plenty of bad complaints splattered all over the web. So how do they get customers? For some time, according to Segel, a google search for an eyeglass brand would yield décormyeyes.com. Borker’s response to the negative reviews: negative or positive an online mention of the company’s name ranks them higher on the google search. Therefore, bringing them customers. For Borker, there is no need to halt the bad service or harassment.

I tested the theory. I searched for “eyeglasses” “designer eyeglasses” “Lafont eyeglasses” and “Chanel eyeglasses”; only “Lafont eyeglasses” gave me décormyeyes.com in the ads section. Theory wrong? Well, the article turned to Google asking the company why their search did not weed out rankings based on the negative reviews. Maybe the method was changed in response to the article.

Google was not the only company mentioned. While Google’s search rankings may not be able to weed out negative from positive mentions, Mastercard, Citibank, and Ebay did little despite knowing full well they were associated with a company that purposefully provided negative service and harassed customers. Their response in the article is that somehow, someway, and through some magical loophole, Borker was able to comeback any time. Only in the end did Segel reveal that after having been contacted by the New York Times, all companies kicked Borker out of their network. The only company with enough courage to not withstand bad service is Amazon. According to Borker, Amazon doesn’t play around with bad service and will kick bad sellers off their site; he is an angel on Amazon. So, great job Amazon for being dedicated to good service.

I am angry that Borker believes this is a good long term business strategy. I am angry that companies claimed ignorance about the so called loopholes of their system (or lack of care for customers) until a journalist came calling.  The good thing is the companies mentioned apparently realized the consequence of bad press and rectified the situation. Borker, as mentioned, doesn’t care.

This is not a stable strategy. It has worked for some time for Borker but unfortunately the integration of social media with the Internet will not allow his business to grow. Social media clearly gives more room for customers to find enough research about the company. As internet search engines further intertwine social media into the actual search, it should be about a year before bad service will either drop search rankings or leave rankings unaffected with customer service ratings attached to the search (google claims this will happen in the near future).

The other reason the business model is not stable: while bad ratings may be good for Borker, it is not good for other affiliated companies. With new legislation protecting consumer rights and disgusting stories of harassment, what company in their right mind would want to be associated with decormyeyes.com? Let’s not be naïve, some companies don't care about complaints but harassment is another thing. The more bad press Borker and decormyeyes.com receives, the more affiliated companies will not be willing to risk reputation and new customers. Borker will have to change his ways or risk abandonment.

Borker is the epitome of anti-salesmanship (as Segel put it) and his shamelessness and badge of pride associated with that is what left me appalled about this man and his deplorable business strategy. So is it worth it? Is a bad reputation and quick one-time customers better than good reputation and long term customers? I think not but I’m just someone who prefers to build relationships instead of burning them before they are created.