A Call For Global Leadership

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When the U.S. economy sneezes, the rest of the world catches cold.
When the U.S. economy catches cold, the rest of the world faces an outbreak.

The credit crisis that started in the U.S. and traveled around the world had already made French, German and British economies suffer massive bailouts, forced the government of Iceland to seize its three largest banks, deepened economic deterioration in Hungary, Poland, Ukraine and questioned economic stability of emerging markets in China, Brazil, Russia and South Korea. Read more

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Crisis Management: Thinking Clearly

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The Global Financial Market Melt-Down

I’ve been at a loss about whether or what to blog about the financial crisis, for several reasons.

  • First, our firm’s largest sector is finance/investments/insurance, and we’ve been up to our eyeballs, on things we can’t talk about.
  • Second, the policy prescriptions for solving the problem have become embroiled in the presidential election campaign.  We try very hard not to be overtly political in our work, and opining on the policy prescriptions risked getting into the presidential election scrum.

But today there’s a teachable moment, so I’ll pounce.
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Humility Update: John Edwards

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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

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Worth Reading: Countering Violent Extremism: Beyond Words, by Amy Zalman, Ph.D.

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Countering Violent Extremism: Beyond Words
by Amy Zalman, Ph.D., EastWest Institute.

Words matter.

Words shape world views. Words provoke action and reaction, which in turn provoke more words. Getting the words right is critically important. Getting the action right is also critically important. And aligning the words and actions is even more important.

Much public diplomacy and other national and international discourse of the U.S. government in recent years has gotten it wrong.

A new policy paper by a Dr. Amy Zalman, published by the EastWest Institute, highlights the mis-steps of the recent past and prescribes solutions for future public discourse.

Dr. Zalman is a senior strategist at Science Applications International Corporation (SAIC), where she focuses on trans-culturally astute research for U.S. government clients. She also writes the “About Terrorism” reference website for New York Times online division About.com. She has a Ph.D. in Middle Eastern and Islamic studies from NYU and is highly proficient in Arabic. I met her when we were NYU faculty colleagues.

In reading Dr. Zalman’s assessment of and prescriptions for future public diplomacy I was struck by how much her underlying philosophy aligns deeply with Logos Institute’s own philosophy about communication as an instrument of strategy. And also how her assessment provides valuable insights not only on ways to counter extremism, but also on best practices in strategic communication across a range of disciplines. Read more

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Humility Update: Pope Benedict XVI

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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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Humility Update: Elliot Spitzer, the Iraq War, and Lessons for Leaders

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Oh, how the mighty have fallen!

Economist Spitzer illustrationOne week ago Elliot Spitzer was governor of New York, working hard to overcome an admittedly rocky first year in office. Today he’s gone, felled by a prostitution scandal that has all the markings of Greek tragedy.

From the moment the news broke last week, I’ve received dozens of e-mails from students, clients, friends, and blog readers asking whether/when I would post about the governor. I held back, for several reasons. First, what can one say in the moment that isn’t in very bad taste or already said? Second, I didn’t want to seem to be piling on. And third, I felt sympathy for the human beings affected by his behavior: certainly for his family; even for Mr. Spitzer; also for the then-unidentified woman, whose photo has now been splashed all over the papers, including the online versions of those sensationalist tabloids the New York Times and Wall Street Journal.

But from a modest distance, some lessons now begin to emerge. One of them is this: Absent a dollop of humility, there’s a substantial likelihood of humiliation. Read more

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The Sticky Wicket – It’s getting sticky in here

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Cricket Batsman

Any cricket fans out there? I just got a crash course in the game this week and all because I read the book, Made to Stick, and found its contents virally adhesive …but I’ll get to that in a minute.

First, I’ll take this opportunity to inaugurate a regular segment of our blog called the “Sticky Wicket,” where we’ll offer little tidbits of crisis management counsel.

Tidbit No. 1. Always see the opportunity in crisis. It’s a batter’s game. Those of you who follow cricket will appreciate that companies (and individuals) facing down a crisis are forced to bat on a sticky wicket, much like cricketeers after a thunderstorm. What is a sticky wicket? In general parlance, it means a difficult and unpredictable situation. But it’s also cricket-speak for a wet, challenging playing field — ground that is mushy in places and hard and crusty in others. To quote the Wikipedia, batting under those conditions “… is awkward and sometimes hazardous, as the ball will spin and seam and there will be variable bounce.” Indeed, when a crisis looms, the real-life reputational match could prove not only difficult and embarrassing but season-ending. Or it could provide an unmatched opportunity for a strategic, steely-nerved batter to shine under adverse conditions and redirect his team’s fortunes.

We always counsel our clients to keep this second possibility in clear focus. For a real-life application of the theory, consider Jet Blue (for the record, not one of our clients) and its video apology. Although the apology is not without flaws or critics, the airline’s use of social media was a groundbreaking response to crisis generally appreciated by its customers and the public at large. It helped to put Team JetBlue back into the game.

Here’s another reason I like the cricket framework: the sports pundits say that the biggest difference between cricket and baseball is that baseball is a pitcher’s game (i.e., the pitcher takes center stage and is challenged by a series of batters), and cricket is a batter’s game (i.e., the batter becomes the focal point of the challenge as he deftly takes on a series of pitchers). Like cricket, crisis management is a batter’s game.

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Aura v. Argument: Lessons from the Presidential Election Campaign

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New Yorker photo 2/11-18
In this week’s New Yorker Hendrik Hertzberg sums up the reasons that Senator Hillary Clinton’s policy arguments aren’t impeding the momentum that is building for her Democratic Party rival, Senator Barack Obama. Hertzberg notes:

An argument is no match for an aura.

I have been thinking about Hertzberg’s insight this week, and noting both how aura v. argument was predictive in recent presidential elections, and how it holds important lessons beyond politics, for corporations and other complex organizations.

Politics and Framing

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Mainstreaming Corporate Responsibility

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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

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Self-Inflicted Harm: From Today’s Headlines (2/6/08)

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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
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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.

YIKES!!!! and DOUBLE YIKES!!!

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