Tuesday, February 08, 2005

Puffery & Tomfoolery

In the most recent issue of FORBES, there is an article about Bristol-Meyers-Squibb that discusses the responsibility of top brass to avoid "puffery."

Apparently the company lost a big hunk of market-cap when it yanked a promising drug from its pipeline - a drug that had been highly touted by top BMS execs, for several months beforehand, as a potential blockbuster. Now, the company faces a big, honkin' shareholders' lawsuit.

Make no mistake (not that I thought you would!) - this is a lawsuit premised on the power of PR.

Loyal readers (thanks, Mom!) will remember how I often howl to the winds: "REPUTATION DRIVES REVENUE!"

Ordinarily, I use this expression to suggest that a GOOD reputation will lead to INCREASED revenues. In this case, however, the reverse is equally true.

Any time a corporate exec opens his mouth, he's staking his company's reputation on the words that issue forth. And no one wants to buy anything from a guy whose breath smells like shoe-leather.

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