THE CASCADING DECLINE AT THE BBC

Posted in BBC, Corporate Crisis Management, Covering for the organization, Crisis Management, Crisis Management Response, Crisis Mitigation, fix the problem, Protecting the organization at any cost?, the effect of ignoring a problem on November 14th, 2012 by mnayor

Covering for the organization rarely works. Neither does the belief that an organization is so strong and respected that it exits on a level all its own.PennStateofficials found that out recently and now the BBC is suffering from the same ill-advised mentality. Whistle-blowing is a separate but related topic but the concerted effort of many in positions of power at an organization to hide something or sweep it under the rug deserves special attention.

 

For many years a popular, long-time host at BBC, Jimmy Savile, was suspected of sexually abusing young people, sometimes even at the premises of the BBC. The Company recently came under blistering attack when it was learned that an investigation of Savile had been cancelled by the editor of BBC’s Newsnight program last year. Newsnight is an important current affairs program of the BBC. Mark Thompson, the BBC’s Director General until last month (and who is destined to join the New York Times shortly) claims to have had no knowledge of the accusations against Savile although there were many opportunities to delve into the matter if he chose to do so.

 

Within the last week and in a matter of weeks since Thompson’s departure, his successor, George Entwistle, resigned because of another flap, again involving Newsnight, which wrongly implicated a Conservative Party politician in a pedophile scandal inWales. And just yesterday the BBC’s Director of News, Helen Boaden and her deputy, Stephen Mitchell announced that they have “stepped aside”.

 

The upshot is that there is turmoil at the BBC. There is a lack of control and the Chairman of the BBC Trust has acknowledged that the organization is in a ghastly mess and in need of a thorough overhaul.

 

How does any organization get itself into this type of crisis and what types of crisis management are called for? First, hubris plays a significant role. When an organization attains a stratospheric reputation such as that of the BBC, those who personify it not only begin to believe in its infallibility but also in their own. Heightened reputations beget dizzying overconfidence. Secondly, there is a tendency of employees, whether they be worker bees or top management to put their employer above all else. Not many people want to be held responsible for the decline or unraveling of an organization. Most want to be team players, no matter what they know and no matter what they really think about their place of work.

 

Crisis management calls for continual checks and balances. An organization cannot continue to coast, as many do, on old and outdated reputations. It is incumbent on top management, and lower levels in turn, to clarify lines of responsibility and authority, to define the values of the organization, to impose clear lines of accountability and to review regularly issues that arise. Often, top management wishes to be insulated from bad decisions already made, and hard decisions that need to be made, even with the knowledge that, more often than not, the buck stops with them and they may be the sacrificial lambs regardless.

Crisis management does not just mean planning to avoid a crisis if possible. Nor does it just mean managing a crisis once it hits. It also means taking steps to mitigate a crisis in the works. A CEO and his/her lieutenants are charged with monitoring the ship as a captain of a vessel or plane would. Rectifying what is wrong is a vital part of the job. Time does not absorb and dissolve a bad decision. It only heightens the culpability of the parties who either made no attempt to rectify it or tried to white-wash it. This is a hard lesson for people such as the former President of Penn State and the late Joe Paterno. It is a hard lesson for the former and current management of the BBC.

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CRISIS MANAGEMENT VERSUS HUBRIS

Posted in Business Crises We Create, Business Crisis Management, Crisis Communication Failures, Crisis Management Services, Crisis Mitigation, David cameron, News of the World, reputation management, RUPERT MURDOCH on July 18th, 2011 by mnayor

Does history merely repeat itself instead of teaching us anything? Based on business news about movers and shakers one could deduce that many corporate executives just don’t get it and never will.

After the debacle of 2008 when many financial CEO’s were caught in the proverbial headlights, you would think that a tough lesson would have been taught – and learned. Instead even Teflon-coated Warren Buffet decided that his power, authority and standing in the world were enough to allow him to initially stonewall the public about his executive Dave Sokol’s purchase of Lubrizol stock. Not to be outdone Rupert Murdoch has raised the bar even higher.

In a scant two weeks his empire, headed by the subtly named The News Corporation, has experienced what many would not wish on their worst corporate rival. After approximately four years of an on-again, off-again Scotland Yard investigation of phone hacking by News of the World tabloid, that paper has folded, Murdoch’s attempt to acquire the remaining interest in British Sky Broadcasting (BSkyB) has been aborted, and a slew of his corporate executives have been arrested, resigned or otherwise had their reputations besmirched. Rebekah Brooks the CEO of News International, the parent of the late News of the World resigned in disgrace, after two attempts at resignation that were not accepted by Murdoch. Also, Les Hinton, publisher of the Wall Street Journal tendered his resignation the same day.

The details of the outlandish accusations are certainly important but how they were handled by Murdoch is equally important and instructive. For a “media” guy, you would think he would know how to handle as big a story as this. Instead, up until yesterday we heard nothing from Murdoch – and then when we did, we heard the hrrumphing of a corporate big-wig instead of the measured pronouncements of a savvy media executive. Last week Murdoch flew to England from the U.S. Very quickly News of the World was closed, after a 168 year life. Yesterday he told a reporter for the Wall Street Journal that the matter was handled “extremely well in every way possible”. He further stated (apparently referring to his upcoming testimony before Parliament’s select committee on culture, media and sport on July 19th at which initially he and his son, James, declined to appear) that he was eager to address things said in Parliament some of which “are total lies”. Finally, he refuted the allegation that he might spin off his newspaper operations into a separate company as “total rubbish”. He did visit the family of Milly Dowler, the thirteen year old who was killed and whose phone was hacked; and extended apologies to the family. This last weekend he placed full page apology ads in British newspapers.

What kind of media executive fails so miserably in handling a business crisis like this? Who leaves a yawning time gap of two weeks before stating anything? If we assume the complete innocence of a CEO, we would then expect that leader to dig for the truth and let the public know immediately. Silence can only foster the impression of knowledge and guilt. An announcement that the matter is being extensively investigated and that such conduct is not tolerated in the organization goes a long way to safeguarding one’s reputation and possibly the organization itself (many pundits found the sudden closure of News of the World suspicious, based on protecting the Murdoch empire from legal liability). There were and may still be ways to staunch the bleeding, but it may now be very difficult to do. Clearly Murdoch did little or nothing immediately. As a result his empire is suffering and will continue to do so, as stakeholders in Britain and worldwide continue to question his tactics and the integrity of his enterprises.

Many people in the newspaper industry who have been interviewed about the phone hacking scandal find it implausible that editors and publishers wouldn’t know about the sources of stories. They must have known about the hacking and therefore it was both a bottom up and top down conspiracy. Rupert Murdoch may have had knowledge and thus the reason for the code of silence to date. It will be interesting to hear his testimony. At all costs he must avoid appearing out of touch with his businesses, imperious because of his power, or delusional that his connections will protect him. From David Cameron on down, the flight to high ground has begun.

Events seem to be gathering speed as this is being written for publication. Rebekah Brooks was arrested and released on bail. The leader of London’s Metropolitan Police Services, or Scotland Yard, Paul Stephenson, and his deputy have stepped down under growing allegations that the respected organization was very cozy with members and agents of the Murdoch empire; and more information is surfacing about David Cameron’s personal relationships and frequent meetings with similar individuals.

As individual reputations begin to crumble, little effort seems to be directed towards salvaging the Murdoch enterprises, some of which are very much worth saving. Placing someone who is untainted in a position of authority would appear to be necessary and Joel Klein would seem to be the man to take charge right now. The businesses must be separated from the personalities and be made to run as business as usual. There is no sense in allowing individuals – any individuals – to drag down an entire business empire. Klein has a good reputation (a lawyer who was head of the New York City School System until he joined Murdoch), and can direct the “clean” Murdoch business units on a steady course until the mess can be sorted out or until it at least simmers down.

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NICKEL DIMING YOUR REPUTATION TO DEATH

Posted in Airline Industry, Banking Industry, Business Crises of our own making, Business Crises We Create, Business Crisis Management, Crisis Management Consulting, Excessive consumer fees on December 1st, 2010 by mnayor

Whole industries have the ability to shoot themselves in the foot. Two that leap out at America daily are the airline industry and the banking industry. Single handedly, without help from anyone or anything else, they have made themselves the bad boys of American business. Could it be possible that no one in either of these industries has figured out that they were making themselves despised by the public? Could it be possible that no one in either industry can figure out how to be respected once again? The answer: so far, no.

There could not be one intelligent airline executive who believes that nickel-diming the public is a popular move – or even an acceptable move. But acceptability pales compared to the bottom line. If revenues are significantly enhanced, then the bottom line wins out. It’s certainly understandable that financial health is vital. Those who sit around the conference table and come up with the add-ons are most likely rewarded or at least singled out. But are they really doing what’s in the best interests of their companies?

Meals, pillows, blankets, luggage handling, preferred seating, bathroom use. You name it and it’s an additional charge. Who will be the corporate hero who says this is inane. Who will be the one who says we can gain a lot of goodwill by announcing the end of these charges? Who will be the one to say let’s add ten to twenty dollars to the cost of a ticket and be done with it. Let’s announce that we are back to being a full service airline. No food on short flights – OK. Smaller, simpler meals – OK. Not so many pillows and blankets to clutter the floor with – OK. Who will be the brave anti nickel-dimer?

But before you get to the airport for your aggravating trip, you first must go the bank for preliminary aggravation preparation. Use the ATM? Use your debit card and exceed your balance by 63 cents? Have a checking account you hardly use? A monthly service charge for the bank’s use of your money? Significant interest on your credit card balance? Not to worry. We’ve got you coming and going. The household name banks aren’t doing badly, thank you. Except that their success is on your back. Not quite the same as they’ve got your back.

Why rock the boat when revenues are flowing. Good enough question except it is perception and goodwill that suffer. Who is going to be the wunderkind of the banking world who steps up and says it’s time to stop? Let’s get back to being a bank. We’re supposed to lend money. We are supposed to be an important engine of the economy, not a parasite that just gorges on fees at the expense of our customers. Back to lending where we can make the same money by doing what (hopefully) we do best.

Being in an industry that, while competitive, still plays follow-the-leader often results in bad decisions that are followed blindly by the rest of the herd. Herd mentality can be dangerous. Oftentimes it takes advantage of the public. Oftentimes it undermines reputations as well. Alternatively, independent thinking can burnish images and can reap big rewards. Kudos to the big bank or the major airline that announces that it is separateing itself from the other guys.

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BP’s TROUBLES

Posted in Anticipating A Crisis, Corporate Crisis Management, Crisis Communication Failures, Crisis Communication Implementation, Crisis Management, Crisis Management Planning on May 18th, 2010 by admin

When it rains, it pours. So many crises involving nature. Volcanic ash. Bubbling oil. I have very strong hopes that the earth doesn’t crack open. Disasters of this nature make one feel that protecting a corporate reputation is not all that important in the total scheme of things. But protecting a reputation is very important – as long as the entity being protected is worthy of the effort.

BP in general has manned-up. It has acknowledged its responsibility (at least in part). It has gone before the public almost daily it seems in order to give status reports. It is trying many different schemes to cap the oil gushing into the Gulf. Yet, it is the butt of jokes and is not coming off as a responsible corporate citizen. Something is lacking. Read more »

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GOLDMAN SACHS PART II

Posted in Crisis Communication Failures, Crisis Communication Strategy, Crisis Litigation, Legislative Advocacy, Liability Communications, Litigation Communications on April 29th, 2010 by admin

Being sued is one thing. Hopefully you can defend yourself. Proving your or your company’s innocence can be a full-time job. A good defense not only saves you money – damages, including punitive damages – it also saves your reputation. In fact, the costs of litigation, as high as they are, can, in part, be chalked up to the cost of good public relations. Guilty parties, however, pay the price.

Read more »

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GOLDMAN SACHS PINSTRIPES TO PRISON STRIPES

Posted in Crisis Communication Failures, Crisis Communication Response, Crisis Litigation, Liability Communications, Litigation Communications on April 29th, 2010 by admin

I’m only kidding. I don’t think any of them will go to jail. They are smart. And they are wily. They did terrible things, low down and scurrilous, greedy, selfish, un-American, with the best interests of themselves at heart – but NOT ILLEGAL.

Years ago capitalism meant something. Something constructive and creative. Today the meaning has been reduced to “getting yours”, no matter what the cost is to others. Getting yours often means selling thin air, creating nothing and selling it for a premium. And that is what Wall Street often does. It creates “products” – financial products that create nothing. The products are nothing more than new casino games people can bet on. And Goldman created many, especially ones that let some of their clients bet against the U.S.A. Now Goldman says it gave its clients what they wanted. I doubt it. It’s hard to envision clients coming up with these schemes and asking Goldman to create the vehicles. Easier to envision is a group of Goldman players sitting around a conference table kicking ideas back and forth about what they think they can sell.

But, I digress. The point is that Goldman is in crisis mode. The players have been severely criticized for bobbing and weaving before the Senate and not being forthright and not admitting their culpability. But hold on. Individual members of the firm and the firm itself have been sued. This situation perfectly demonstrates the conflict that often arises between a company’s legal counsel and its PR people.

Wouldn’t it be nice and perhaps even productive if Goldman threw itself on the mercy of public opinion. We are a forgiving nation. We love it when someone or some thing is brought to its knees. We then go on to the next biggest thing on the national agenda. We have short memories. But what’s a company, individual or non-profit to do when litigation or administrative sanctions are staring them in the face. There are a few things: deny outright, regret the situation but make no admission, blame someone else, plead ignorance, admit some unintentional mistakes were made, etc. None of the options are particularly pleasing. Two were in plain sight at the Goldman hearings: outright denial that anything wrong was done, and secondly, admit fuzzily that some mistakes may have been made. But certainly no one wanted to get his you-know-what caught in the wringer, or be responsible for the downfall of his employer or former employer.

The moral of the story for crisis management is that, depending on the circumstances, one must be very careful. Legal advice that is tantamount to “No Comment” or “I can’t discuss this because it is in the courts” may at times have its place in crisis management. P.R. and marketing types are not always right and neither are the lawyers who are protecting a client’s interests. But there are often ways to take advantage of situations – to explain, to be contrite, to regret situations, all without admitting liability. It’s up to you, the individual client, to weigh the advise and find the intelligent path that both protects you and your company’s interests and at the same time deals constructively with the crisis and public perception.

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THE CATHOLIC CHURCH AND CRISIS MANAGEMENT

Posted in Crisis Communication Failures, Crisis Management Response, Crisis Mitigation on April 5th, 2010 by admin
Sometimes it pays to come out fighting, with fists flailing away. Other times it looks mighty defensive, if not downright ridiculous.
To equate the current “persecution” of the Pope with the persecution of the Jews during the holocaust falls into the latter category. Furthermore it just digs the hole deeper. Now instead of appearing not to understand the seriousness of deviant sexual behavior within the Church, Rome makes itself look quite hardened to the death of six million Jews, lending truth to the many accusations of antisemitism over the years.
What to do? Presumably, direction is not coming from the top, but it should. A few competent souls need to plan and orchestrate a world response. This has to be done with great foresight and intelligence – and bravery and humility. The planning must be two-pronged. Not only must the words be chosen carefully and sensitively, but the actions must be carefully planned to prove to the world that the Church wishes to correct its mistakes and to make the Church a better place. The desire to make real corrections within the Church must be genuine.
Next, the bureaucracy has to muzzle self-appointed spokespersons who are inept. The spokesperson needs to be the Pope or someone with the stature to be taken seriously and as the final word on the subjects that are plaguing the Church. Of course Rome cannot muzzle individual priests but no one will mistake individual comments with the declarations from on high.
Creating window dressing and masking mistakes of the past haunt the Church. The expression of genuine regret, acknowledgement of past transgressions, the will to deal with issues head on and actually implementing changes and punishment of transgressors will help restore the Church. Otherwise Rome will be reigning over an ever more exclusive club whose membership will surely diminish as defections escalate.
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