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Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. Business model innovation, strategic leadership and smart economic policies are her professional passions. A former Madison, WI resident, Kay now resides in San Diego, CA. The views on her blog are not those of her employer, IBM.

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February 8th, 2012

Business model lesson in Komen’s public relations disaster

Susan G. Komen for the Cure®, global leader of the movement to eradicate breast cancer, learned a painful lesson last week that we should all remember. An organization’s value promise must guide every decision it makes unless it has previously alerted stakeholders to caveats.

Komen unkowingly stepped into quicksand last week.

Your value promise captures the beneficial outcome your organization aims to create for your customers. Komen promises donors a terrific feeling of making a difference, by allowing them to honor a friend or relative affected by breast cancer and by giving hope for better treatments and even a cure.

A remarkably successful non-profit and the leader in the breast cancer space, Komen protects its coveted “pink” and “Race for the Cure” brand identifiers like a lioness guards her cubs. So powerful is Komen’s presence that for every US woman who correctly identifies heart disease as women’s greatest health risk, there are almost three women who incorrectly think it’s breast cancer (13% versus 36%). Is it any wonder why Komen garners generous race sponsorships from organizations seeking brand building through association?

Komen’s public relations fiasco arose from making Planned Parenthood ineligible for their grants that fund breast health and education services. (totaling about $700k to 19 out of 83 chapters). Komen cited two new criteria to strengthen its grant process, neither of which Planned Parenthood met:

  • Komen will not fund organizations under investigation. US Representative Cliff Stearns (R–Florida) is investigating whether Planned Parenthood broke legislative requirements that government health care funding be segregated from abortion funding.
  • Komen will only fund organizations offering mammograms. Planned Parenthood provides mammogram vouchers for discovered lumps.

Any fact can be viewed from a different lens, as in this case. Planned Parenthood concluded the criteria additions resulted from Komen bending to the right-to-life lobby, announcing this conclusion through its grass roots lobby. Compelling support for their argument? Karen Handel, Komen’s newly appointed senior VP of policy ran for Georgia’s governor in 2010 on a right-to-life platform, promising to defund Planned Parenthood.  In addition, Representative Stearns’ investigation appears, like others before it, politically motivated according to Planned Parenthood.

Komen stuck with its “we’re making smarter grants” storyline until it encountered a social media tsunami of women protests too strong to stand up against.  Concurrently, Komen’s director of community health programs, responsible for making grants, resigned and some Komen chapters (who manage local Runs for the Cure) publicly expressed disagreement. Planned Parenthood garnered an incremental $3M in funds while some Race for the Cure sponsors pulled support. Ouch!

Your value promise must guide every decision. Apple, for example, won’t reduce manufacturing costs if doing so compromises end-user experiences. DuPont won’t knowingly reduce product reliability. Komen’s value promise demands that breast health, not views on when life starts, drive decisions. And there’s no question that Planned Parenthood uniquely advances breast health.

Before the new criteria, Komen itself noted that in some communities Planned Parenthood is the only place that uninsured or under-insured women can receive breast health services. 75% of women served by Planned Parenthood have incomes 150% or less of the federal poverty level and poor women tend to discover breast cancer at later stages than non-poor women. Furthermore, only larger clinics can afford expensive mammography machines and are typically not located near poverty centers, unlike Planned Parenthood clinics.

Leaders have the right to add caveats to their value promise. (E.g., The American Heart Association will not fund research involving embryonic stem cells.) But Komen had never revealed any caveats to its racers, donors or sponsors, stirring anger. “Breast health or right-to-life? Which matters most?” some rightfully asked.

With public relations consultants finally on board, Komen narrowed its “no investigations” criteria to “no criminal investigations.” Who knows if Komen’s demand that grant recipients offer on-site mammograms will remain in place? The murkiness adds to the distrust created by Komen’s decisions, while Handel’s abrupt resignation this week creates distrust within the pro-life community.

Unfortunately for Komen, its flip-flop advantaged a new direct competitor. A very savvy Planned Parenthood channeled unexpected incremental donations into a newly created dedicated-fund to advance breast health.

The lesson for you? As in life, breaking your promise destroys the trust customers have in you. If Wall Street is a factor in your valuation, you’re wiser to speak truthfully about performance versus expectations than meet expectations by breaking your value promises. Making your quarterly numbers at the expense of your value promise will trigger a downward spiral that will be less visible than Komen’s fiasco, but no less risky.

1 comment to Business model lesson in Komen’s public relations disaster

  • Julie

    Very interesting article, and I totally agree with you. If somebody wants to be successful on the business life, and wants to build up the trust which is required for the success, than he/she needs to play fair. Marketing isn’t about lies, in the most cases it is really worth to speak honestly to your costumers, they’ll honor it with buying:)
    Julie´s last [type] ..cosmetic dentist

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