How bad can it get for SpinVox?

When I think about SpinVox and the huge public kerfuffle that broke out last month stemming from allegations made in a BBC investigation over SpinVox’s audio-to-text transcription service, Billy Flynn and razzle-dazzle from the musical Chicago is mostly what springs to my mind.

(You can read the lyrics, too.)

The allegations the BBC and others have made are pretty serious – they’re largely about how much of SpinVox’s transcription work is done by computers, how much by people in call centres abroad, and whether the company is in breach of any UK and EU data protection laws – to which SpinVox responded shortly after the BBC’s initial report with a formal statement robustly addressing and mostly dismissing the charges, followed up with an informal commentary in a blog post.

Those responses haven’t really satisfied anyone, though (looking to me rather like the razzle-dazzle epitomized by Richard Gere as Billy Flynn in the song).

Or, to borrow an advertising metaphor, maybe the question is: where’s the beef, SpinVox?

I’ve commented about this SpinVox kerfuffle from the broad PR and specific reputation-damage perspectives in various episodes of the FIR podcast (471, 470 and 469) plus a couple of audio commentaries at Audioboo.

My views have represented only one voice among many as the blogosphere has been alight with commentary and opinion about SpinVox for much of this time, with increasingly-loud calls for the company to conclusively address the allegations.

SpinVox chose to do that via a carefully-controlled event to which journalists and some bloggers were invited – although at least one blogger refused to attend because of the control – and at which the company would demonstrate its technology. The event took place on August 4 at their Marlow headquarters.

razzledazzle
Unfortunately for SpinVox, the demo didn’t produce the reactions I’m sure they were hoping for if not expecting: acceptance of their demo as addressing the allegations in ways that would make all the noisy criticism go away.

What happened instead was very interesting and something that, in my view, could and should have been easily anticipated and planned for – the questions many journalists and bloggers wanted to ask had nothing to do with the tech issues that SpinVox were demoing on August 4, and instead all to do with SpinVox’s business.

Attention had already shifted, in other words.

TechCrunch Europe blogger Milo Yiannopoulos described the situation pretty well:

[…] The aim of the day had been to show us how the technology works. First of all: it didn’t, beyond transcribing a simple message in a quiet room. But secondly, and more importantly, that’s not actually what people want to know about any more: since SpinVox refuses to go on the record about the level of human involvement, the media will be left having to continue to speculate about that number, and no doubt investigating it as well.

The sorts of question we did want to ask included:

  • “Do you have a Chief Financial Officer?” They don’t, and – astonishingly – haven’t had one for eight months. This is a company with hundreds of millions in venture backing.
  • “Are your investors comfortable with your CEO being paid over half a million pounds a year when the company doesn’t even break even yet?”
  • “Does the fact that you just accepted another cash injection of £15million mean – given the date of your previous round of investment – you’re burning through £3million a month?”

If I’d been SpinVox’s PR, alarm bells would have been ringing very loudly indeed the moment I read the phrase “that’s not actually what people want to know about any more,” never mind the specific questions Milo asked.

More importantly, though, I would have asked myself the question, long before the day, “We have all these journos and bloggers showing up on August 4: what kind of questions might they ask other than related to the tech we’ll be demonstrating?” and then made sure everyone who played a role on August 4 would know what to say and feel confident about saying it.

PR planning 101, surely, never mind crisis communication planning (a little late if there’s no crisis plan in place).

To add to SpinVox’s PR and reputational woes comes a report in today’s Sunday Times that the company is investigating the activities of some senior executives after a dossier alleging financial mismanagement was circulated anonymously to shareholders.

[…] The extraordinary six-page dossier, a copy of which has been seen by The Sunday Times, makes a series of claims about Spinvox’s finances and accounting practices, and contains accusations of misappropriated company resources.

Sources at the company said nobody had been suspended while the investigation was under way. Spinvox claims that it is a victim of a smear campaign being conducted by vengeful former staff.

The company’s legal adviser, Pinsent Masons, said: “Our clients have contacted those ex-employees it believes are responsible for the contents and distribution of the letter and we are advising our client on the legal options available to it.”

This is now well beyond purely PR, although PR clearly has a significant role to play in what the company does to address all the issues before it and how it communicates.

I really do hope it’s all not just razzle dazzle.

[Update Aug 10] Some further developments since I published this post yesterday.

The Financial Times follows the report in the Sunday Times about the anonymously-circulated ‘financial dossier.’ The paper doesn’t add anything new to what the Times says. But, the story now has the attention of another influential international newspaper, one that SpinVox investors undoubtedly read.

The Guardian, meanwhile, says Spinvox steps up claims of smear campaign, concluding:

[…] While there’s little that’s transparent about the goings-on at Spinvox right now, it will be worth watching how far they take their smear claims: Phorm, the last company to try hitting back at its detractors, saw its own stroppy campaign backfire.

This idea produced negative opinion from some in my Twitter community when I posted the Guardian report to Friendfeed:

RT @jangles: Spinvox steps up claims of smear campaign | Technology | guardian.co.uk http://ff.im/6obax (terrible bad move, imo) – @PatPhelan

RT @jangles: Spinvox steps up claims of smear campaign |Technology| guardian.co.uk http://ff.im/6obax < risky tactic imho, odds it backfires – @freecloud (Alan Patrick)

RT @jangles:Spinvox steps up claims of smear campaign | Technology | guardian.co.uk http://ff.im/6obax <bunker thinking. – @PaulSweeney

#prdisaster very bad move RT @patphelan RT @jangles: Spinvox steps up claims of smear campaign Technology guardian.co.uk http://ff.im/6obax – @republicpr (Simon Palmer)

PR Week has a report this morning that SpinVox has called in Brunswick Group to “help manage the media fallout.”

[…] Voice-to-text firm SpinVox has called in Brunswick for a financial brief, according to reports this morning. […] The appointment comes days after Spinvox extended retained agency Porter Novelli’s brief (PRWeek, 28 July 2009). 

The agency was tasked with helping to response to potentially damaging claims by the BBC about the company’s technological processes. […] Brunswick refused to comment and Spinvox could not be reached for comment on the story at the time of publication.

So, two PR agencies to get a grip on things.

Not before time as a simple search on Google News clearly suggests.

Finally, there’s a handy Delicious bookmark account with links to media and blogosphere reports and commentary I’ve seen so far (and much that I haven’t seen before.

I’m unclear re whose account this is: could be SpinVox.

Now there’s some transparency if so.