Hey Amazon: It’s 2019 not 1920

Citizens, not powerbrokers, are the key to the deal and corporations should beware of growing populism against “corporate greed.”

I can’t think of a better example to demonstrate the basic rules of engagement:

  • Do the research.
  • Know the territory.
  • Keep your finger on the pulse.
  • Make friends before you need them. 
  • And never, ever take anything for granted.

If Amazon had approached this deal the same way they created loyal customers they likely could have avoided this very public catastrophe in Long Island City. But instead one of the largest companies in the world, along with two powerful politicians, got their “butts kicked.” If they had taken the time to understand the territory, communicate and build alliances, I would argue they could have had a very different outcome. 

Instead they relied on old school thinking. They decided the support of two popular powerbrokers– Governor Cuomo and Mayor de Blasio – was enough. Surprisingly, these two very experienced politicians either didn’t advise Amazon – or Amazon didn’t listen – to first build local leader and citizen support. With perfect 20-20 hindsight, Mayor de Blasio stated, “We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world … Instead of working with the community, Amazon threw away that opportunity.”

In today’s world of social media induced activism, the outspoken views of a few activists are amplified, giving voice to what some others are thinking, and that quickly cascades into the appearance of a movement. In this case a so-called movement that gave citizens and local leaders a huge and unexpected victoryand provided a national platform for populists who are increasingly looking askance at corporate activities. Consider that on the day Amazon bailed and GE fessed up the 800 jobs it promised were only 250, John Boyd, a specialist in such deals, toldThe Boston Globe of “unprecedented citizen contentiousness” with “an increasingly populist zeitgeist among politicians,” citing “income inequality” and “the gulf between haves and have-nots.”

I don’t know whether Amazon did a poll before they selected Long Island but even if they did, things changed dramatically from when they entered the market in 2017 and 2019. Just ask 10-term Congressman Joe Crowley. Regular polling would have picked up on fast-moving changes and they would have recognized that last year’s elections shook the foundation of state politics and the support for their proposal. They would have have seen the deep and growing division between the centrists who seek jobs and economic growth and a growing force of new residents and young populists for whom tax incentives and corporate behemoths are unpopular.

Careful analysis of tracking polling would have shown the skepticism among African Americans, Latinos, Asians and the other nationalities that make Queens the most ethnically diverse urban area in the country. Indeed, there are nearly 50 ethnic newspapers and magazines published in the Borough. And, if they had their finger on the pulse of the community they also would have recognized and have had the time to deal with union opposition (a resurging political force as demonstrated in several state ballot measure wins in the 2018 election that corporations should take note of) by working earlier with union leaders and doing outreach to individual members.

Amazon and the political leaders they had on board were not able to effectively communicate the local value of the deal’s merits. People didn’t hear that the $3 billion in tax breaks for Amazon was – for the most part – reductions in future taxes. Instead, what they heard and got mad about was the carve-out in the deal for a helipad for executives … instead of support for mass transit. The message about the $3 billion in incentives bringing $27 billion in revenue to support infrastructure upgrades for schools, roads and sidewalks, parks and other improvements in neighborhoods was lost in the fray.

In the wake of Obama populism, the model of community organizing has translated well for the new business paradigm. Airbnb has navigated its way through cities around the world to grab its share of the tourist hospitality trade. Ride sharing ventures like Uber and Lyft have rallied support –neighborhood by neighborhood, census tract by census tract – to dramatically reshape the transportation culture.

How could Amazon and New York not make it work?  Did they ignore the fundamentals:  pulling everyone around the proverbial table and making all seated feel they were about to share in something exciting for their city, their neighborhoods, their livelihoods, their families,their futures

Perhaps the memo was lost, the one somewhere between Seattle, Albany and City Hall; the one that prescribed building grassroots coalitions and neighborhood advisory groups and business advisory panels and education and community alliances.  The one that required listening.

February 18, 2019 

Suzanne Hammelman, President, The Hawthorn Group
shammelman@hawthorngroup.com

LIPTON OR BIGELOW?

 

It may be “the economy stupid” but the latest NBC/Wall Street Journal poll shows that despite Republicans controlling the White House and Congress, they “didn’t have a clear advantage among voters who said the economy was the most important or a very important issue.”

In fact, the survey is “a sign that many voters are looking for a check on Mr. Trump” with more than half “less likely to vote for a candidate who sticks with the president on policy issues more than 90% of the time.”

Besides, as Emory University scholar Alan Abramowitz sees it, a humming economy and support for the party in power do not always correlate. (npr.org/2018)

Consider, though, the president had not lost the loyalty of laid-off nail plant workers in Poplar Bluff, Missouri affected by tariffs on Mexican steel.  But while early payments for farmers hurt by tariffs kick in before the election, corn growers apparently get only a penny on the bushel. 

Then, there’s the “enthusiasm gap” which elections expert Amy Walter sees as a possible preview of that cautiously-predicted “blue wave” (Wall Street Journal, “Is Trump Creating New Republicans?” September 21, 2018). Yes, Republicans are about as charged up now as they were in the 2010 Tea Party surge, and the party’s 47% national favorability rating is as high as it has been in seven years.  A review of polling on races from California to Florida suggest that in terms of support level and turnout, Latino voters are no sure bet to help Dems.

But Nate Silver looks at special elections during the Trump reign as a barometer of “the sort of turnout one might expect in this year’s midterms.” It led one respected political handicapper to suggest an “herbal tea party” this cycle.

And while tea is unlikely to be featured at any collegiate football tailgates this fall – or any fall for that matter –sip on this with your Jack and Coke:  Senator Mike Espy?  Yeah, yeah, even the Cook Political Report has both Mississippi senate seats in decidedly Republican columns.  But there’s a possible path for the former Clinton cabinet secretary in a runoff the Tuesday after Thanksgiving with Sen. Hyde-Smith in which the Chris McDaniel anti-Republican establishment stays home or delivers a revenge vote for the Democrat.

That doesn’t leave much time to digest turkey and pumpkin pie if flesh needs to be pressed.  And what might draw some national party names to the Magnolia State that holiday weekend? The Ole’ Miss-Mississippi State showdown is Black Friday.  At this writing both teams have identical 3-1 records.    

Labor Rocked in Little Rhody?

On the heels of Missouri’s astounding beatdown of its right-to-work law earlier this month, organized labor faces a formidable challenge in Rhode Island’s public union-disaffiliation campaign, an offshoot of the SCOTUS ruling in June, citing First Amendment grounds, that non-union workers cannot be compelled to pay dues to the labor group organized at their workplace. 

In the Show Me state unions pumped five times the $3 million-plus spent by anti-labor groups for a do-over of the 2017 law giving private-sector workers the OK to forego paycheck deduction to the union.

When Missourians crushed the legislation August 7 by a two-to-one margin it marked the first time voters in any state had tossed out right-to-work.  Though 120,0o0 signatures were required to place repeal on the ballot, 300,000 were collected.  In the campaign to prevail, pro-union canvassers hit a half-million doors, according to AFL-CIO boss Rich Trumka.  It was a sweet reward for the union president marking a half-century in the labor movement.  A week before the vote he confidently predicted victory.   

Keep in mind fewer than one in ten Missouri households are union.  Only three of the state’s counties supported the top of the Democratic ticket in 2016.  Still, 100 of 115 counties voted to scrap right-to-work. 

But duplicating that labor movement success in New England may be formidable.  A $10 million campaign was launched this past week with mysterious funding to stop Rhode Island from deducting from the paychecks of non-union public sector workers, including teachers, almost the equivalent of union dues. 

State teachers’ union chief Robert Walsh is fighting the “extreme right wing dark money” behind the anti-labor push.  Governor Gina Raimondo, who herself is trying to land another term this fall, says through her spokesman that “the Koch Brothers and their allies” are behind the union disaffiliation effort. 

The governor has directed her administration to protect the privacy of public employees by making their postal and online contact information inaccessible.  How dare she, proclaims Mike Stenhouse, who heads the Rhode Island Center for Freedom and Prosperity, of the edict issued to coincide with National Employee Freedom Week (August 19 -25), an observance to mark this summer’s High Court decision undoing the longstanding workplace payroll rules.

Stenhouse says while virtually every dollar raised for his Center comes from “local private sources” he is intent on keeping it private.  We’ll be watching to see if a Missouri miracle can be duplicated in the Ocean State.

“Gathering of the Elders (and not so Elders)”

Three generations of political operatives gathered at The Hawthorn Group’s annual “Gathering of the Elders (and not so Elders)” dinner at Equinox in Washington, D.C. Thursday night.

Veteran prognosticator Charlie Cook (“The Cook Report” and “National Journal”) shared his current assessment on the outcome of November races, an in-depth analysis of the Democratic “wave” and the Republican “seawall.” As of NOW, Cook said he give the Democrats better than a 50-50 chance of WINNING the HOUSE, but has the Republicans at 65% of KEEPING the SENATE.

Former Mississippi Governor and RNC Chair Haley Barbour shared his “outside the Beltway” view of voters, including their struggles as localized recessions resist the “coastal” recovery. Talking about the political “revolt” of Middle America, Governor Barbour said, “In a lot of smaller cities and towns between the coasts, it’s hard to tell the difference between the last recession and the current recovery. Stores are closed. Good jobs are gone.

Crisis Preparedness: Eight Lessons Learned

Every situation and every client is unique, but there are some basic Crisis Management lessons we have learned over the years:

  1. Everything will become public. Staying under the radar is not an option.
  2. Issues move through organizations/communities/globe in an instant.
  3. The volatility of the political and economic environment has magnified the severity and importance of everyday business issues.
  4. Public trust of business is at an all-time low, and critics will use your problems to their advantage.
  5. You cannot isolate an operating incident. A crisis will impact the entire corporate entity.
  6. Organizations must react quickly and authoritatively, which requires advance preparation and on-going training and practice.
  7. Decisive action mitigates the severity (and longevity) of an event.
  8. Protecting corporate reputation and management credibility are vital to survivability.

The key factors that distinguish those companies that avoid, mitigate and manage crisis successfully from those that don’t: a preparedness culture; a corporate-wide approach to Issues Management; and frequency of training.

Larry Walsh

Co-Chair