What a week for crises!

Forget about the financial melt-down, the transition to the new president, or any of the really old news.

Last week was one for the record books.

The curtain rose Monday, December 8, on the usual tired old economic meltdown crises, particularly  the prospect of an auto bailout (that still hasn’t happened).

Then things got curiouser and curiouser…

Not Available on E-Bay

Tuesday Illinois governor Rod R. Blagojevich was arrested for trying to sell his appointment of President Elect Barack Obama’s vacant senate seat to a high bidder.  He’s still governor (as of 3:30 PM Monday, December 15).

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‘Nuff said….



Here We Go Again

This blog has noted that without a dollop of humility, leaders are at risk of humiliation.

Also that most crises are self-inflicted, and that the timeliness and quality of the response are more predictive of reputational harm than the severity of the underlying event.

We see all three of these principles at play in the John Edwards scandal. Read more

What Happened: Inside the Bush White House and Washington’s Culture of Deception, by Scott McClellan

Almost 20 years ago I was head of communication at a major company, and I spent much of every day speaking with reporters. The deal I had with the CEO was straightforward: “I won’t lie to you; I won’t lie for you; you can’t lie to me.”

At one point my boss lied to me, hoping I would pass the lie on to the press. I called him on it, and he promised not to do it again. Then he did it again. I unknowingly passed the lie on to reporters. They found out, and called me on it. So I quit.

Leaving my job wasn’t a hard decision, even though it was a painful one. Among other things, my wife was pregnant with our first child. And I didn’t have another job to go to. But it was one of the best decisions I’ve made.

Then as now I taught communication ethics in a graduate program at NYU. And one of the perennial questions of communication ethics is: When is it necessary to quit? I don’t suggest that there are easy answers. Every circumstance is a bit different. And it’s a highly personal choice. But there are consequences to making the wrong choice. And we all have to own the consequences of our choices.

Comes now Scott McClellan, in a tell-all book about his time as press secretary for President George W. Bush, that will be published next week. Read more

Pope Waving

Pope Benedict XVI dazzled New York and Washington this week, both with the majesty of his office and with his personal humility. The latter confounded expectations.

I have not been a particular fan of the man who is now Pope. When he was known as Cardinal Joseph Ratzinger, head of the Vatican’s Congregation for the Doctrine of the Faith, he was considered by many to be the then-Pope’s enforcer. In November, 2002, some six months after the Boston Globe broke the story of systemic problems of child sexual abuse in the US Church, Cardinal Ratzinger said, according to the New York Times:

“’In the United States, there is constant news on this topic, but less than 1 percent of priests are guilty of acts of this type,’ he said in November 2002 during a visit to Spain. ’Therefore, one comes to the conclusion that it is intentional, manipulated – that there is a desire to discredit the church.’”

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A big red fish

While many of us feel comfortable with Pay Per Click (PPC) advertising, something like Pay Per Post (PPP) and Pay Per Vote blogging would probably make us feel quite uncomfortable and could disturb our sense of social media authenticity. Most of us have a blogroll we trust and turn to for wisdom on a regular basis. Could we still trust blog posts if Pay Per Post blogging could potentially corrupt social media?

Because blogs and social media web sites generate a lot of traffic, adopting social media tools has become a magic pill for increasing online rankings and amping up revenues.

But is adopting social media tools a magic pill or a red herring? And is a company that seeks lucrative deals in the black market of social media jeopardizing its reputation and creating mistrust among its stakeholders? Read more

Three years ago, when The Economist first published a special report on corporate responsibility, the magazine took a highly skeptical view, asking whether, to justify its activities, a company must do anything more than simply earn a profit?[i]

Not surprising, perhaps, that The Economist would echo the orthodox arguments of Milton Friedman, the economist who famously wrote in 1970 that the only “social responsibility of business is to increase its profits,” and that corporate social responsibility is a “fundamentally subversive doctrine in a free society.” [ii]

I was intrigued when the British magazine took up corporate responsibility again last month. It seems The Economist has had a change of heart.

The Economist’s 2008 Special Report acknowledges that corporate responsibility is now seen as mainstream by leading companies and concludes that it is worthwhile to single out corporate social responsibility “if it helps businesses look outwards . . . and think imaginatively about risks and opportunities.” [iii]

Why such a conversion in the space of three years? One reason may be the backlash generated by its 2005 Report, which was widely criticized by corporate responsibility practitioners and, reportedly, by members of The Economist’s own editorial staff.

It is more likely that The Economist is simply acknowledging business realities it can no longer ignore. Read more

Two stories in today’s (Feb. 6) New York Times compel me to blog.

Each reinforces our recent posts about self-inflicted harm, but each also provides its own teachable moment.

1. Wachovia Bank
Yesterday we blogged about the tendency of companies and their leaders to ignore a problem that is otherwise evident.

Another principle of crisis management is that companies can be forgiven if people have been hurt: killed, injured, insulted cheated, etc. But companies can’t be forgiven, and won’t be forgiven, if they’re seen not to care that people have been hurt.

Today’s Times, in a front business page story, reports that Wachovia Bank, which last year said it was unaware that fraudulent telemarketers were using the bank’s accounts to steal millions from unsuspecting victims, not only knew but had been put on notice about the fraud. Wachovia is the fourth-largest bank in the US.

The Times notes that newly-released documents in a lawsuit show that high-ranking employees at the bank frequently warned colleagues about telemarketing frauds routed through the accounts. Other banks and federal agencies also notified the bank, but it continued to provide banking services to the companies that helped to steal $400 million, the Times reports.


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The most memorable sock-puppet of 2007 was John Mackey, CEO of Whole Foods, who was revealed last year to have used a pseudonymous identity for more than seven years on an online message board. Mackey was not the first executive (or person from journalism, politics or the blogosphere) to have done what the New York Times defines as “creating a fake online identity to praise, defend or create the illusion of support for one’s self, allies or company.”

But with the coming of the New Year, we’ve already seen one of the first widely public cases of two people from a non-profit using an astroturfing campaign to anonymously promote their organization.

The organization is GiveWell, which was launched in 2007 and attempts to analyze the effectiveness of other charities, publishing its findings as a resource tool for potential donors. It received a flurry of attention on December 20, with stories in the New York Times and the Wall Street Journal among other media outlets, with some praising their approach and others offended by their harsh criticism of other charity review sites and charities themselves.

But the greater attention came after first one founder, Holden Karnofsky, and then the other, Elie Hassenfeld, admitted that they had used fake identities to promote GiveWell online. (You can see the overview of all activity relating to this crisis on the MetaFilter wiki here, and an example of Karnofksy’s posts on MNSpeak.)

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What Orwell Didn’t Know: Propaganda and the New Face of American Politics, edited by András Szántó, Public Affairs Press, 2007.

Cartoon medium size: Misleading

George Orwell’s seminal essay “Politics and the English Language” noted that precision in language is a reflection of clear thinking. Imprecise language not only reflects weak thinking on the part of the writer or speaker, it causes weak thinking among its audience. Says Orwell:

An effect can become a cause, reinforcing the original cause and producing the same effect in an intensified form, and so on indefinitely. A man may take a drink because he feels himself a failure, and then fail all the more completely because he drinks. It is rather the same thing that is happening to the English language. It becomes ugly and inaccurate because our thoughts are foolish, but the slovenliness of our language makes it easier for us to have foolish thoughts.

But Orwell wasn’t interested merely in being society’s copy editor. He noted the nefarious consequences of debasement of language in the political realm:

Political language – and with variations this is true of all political parties, from Conservatives to Anarchists – is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.

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