Opinion: The Dangers of Indirect Calls to Violence

This post was originally published in the Daily Kos, a progressive political opinion site.

It was also reprinted under the title “Is Trump Responsible for the Violence?” on the leading corporate communication site CommPro.Biz.

 

by Helio Fred Garcia

The French philosopher and writer Voltaire warned that those who can make us believe absurdities can make us commit atrocities.

We have seen this phenomenon play out in all parts of the world for the nearly 300 years since Voltaire first warned us. And sadly, we see it playing out in the United States now.

I have spent nearly four decades studying leadership, language, power, and the intersection of neuroscience, anthropology, and influence. Most of my work has been in the service of helping good leaders become better leaders. But sometimes my work calls on me to send up a flare; to warn others of what I see happening and about to happen. Events of the last few weeks compel me to send up such a flare.

Genuine leaders understand the consequences of their words and actions and take responsibility when they see that they are having a dangerous impact. Self-absorbed leaders do not.

Stochastic Terrorism

There’s a phenomenon well known to those who study violent extremism and authoritarianism: the use of mass communication to inspire lone wolves to commit acts of violence. About six years ago it got the name Stochastic Terrorism, named for a principle in statistics about seemingly random things still being predictable.

Stochastic terrorism doesn’t make a direct call to violence. Rather, it leads people to take matters into their own hands. So stochastic terrorist violence is statistically predictable, even if it will not predict that a particular individual will commit a particular act against a particular person.

A Clear but Indirect Danger

The First Amendment protects free speech but not calls to violence that create a clear and present danger to people. But stochastic terrorism is insidious because it is a clear but indirect, yet still predictable, danger.

The Stochastic Terrorism Playbook

In the weeks just before the 2018 mid-term elections we saw President Trump use many elements of the stochastic terrorism playbook, that were amplified by conservative media and by Trump supporters who were running for office.

These include:

  • Dehumanizing populations. This includes referring to groups of people as vermin who are infesting the country. And carrying disease – in this case including diseases that have already been eradicated or are very rare, such as smallpox and leprosy. But still scary.
  • Claiming that an entire population is a threat.  From his first day in the race, Trump defined Mexicans as rapists, gang members, and criminals. Candidate Trump also called for the total and complete ban of Muslims entering the country. And on his second day in office he passed an executive order, later overturned by the courts, banning people from seven primarily-Muslim countries. What the singling out of these groups, and others, have in common is that they create an Other — a group to rally against.
  • Labeling an ordinary thing a serious threat. President Trump labeled a rag-tag group of impoverished men, women, and children walking north seeking asylum a Caravan. Note that seeking asylum is legal. And the people were more than a thousand miles away at the time, and on foot. Despite this, he further said that the Caravan is invading the country. Hence the very word Caravan (always capitalized) became itself a menacing word, repeated across all forms of communication — in speeches, in social media, and on television news headlines. He called the Caravan a national emergency. He  also called to mobilize the military to prevent its arrival. And this wasn’t even the first time he had used the Caravan scare. He did it in April as well. That group of migrants fizzled out before most of them reached the border.  Those who arrived sought asylum.  We should have recognized the pattern.
  • Attributing vague menacing identities to that group. For example, the claim that the Caravan has been infiltrated by a number of middle easterners.
  • Saying that something is part of an evil conspiracy. In this case that the Caravan is funded by George Soros, which is white supremacist code for an international Jewish conspiracy. Note that the first bomb received in late October was sent to George Soros. Followed by an attack on a synagogue by a person driven by an urgent need to prevent Jews from bringing in refugees in order to kill Americans.

Within a single week in late October we saw tangible evidence of such rhetoric inspiring violence.

  • A bomber attempted the largest assassination of political leaders in the history of the U.S., sending bombs through the mail to more than a dozen people who had each been the target of President Trump’s vitriol. Thankfully, none of the devices exploded, and all were retrieved. But authorities found the names of nearly 100 Trump critics on the bomber’s target list.
  • A gunman attacked a Pittsburgh synagogue during worship, killing eleven and wounding many more. He posted online about “Jewish infestation.” In the hours before the attack, making reference to a more than century-old refugee resettlement agency, he tweeted, “HIAS likes to bring invaders that kill our people. I can’t sit by and watch my people get slaughtered. Screw your optics, I’m going in.” During the attack he yelled “All Jews must die!”
  • A gunman tried to penetrate a Louisville black church but found the doors locked, and instead went into a neighboring Kroger’s store and murdered two black customers there.

There are likely to be further such acts.

Birtherism

Former First Lady Michelle Obama this week, in interviews about her forthcoming memoir, described her reaction to Donald Trump’s birther campaign, which put him on the political map for the 2016 presidential campaign. For years before and during his presidential campaign Trump persistently insisted that Barack Obama was born in Kenya, and therefore was not a legitimate president. Trump refused to acknowledge Obama’s Hawaii birth certificate, and frequently made other claims that challenged Obama’s legitimacy as president.

In her book Michelle Obama writes that this campaign was

“deliberately meant to stir up the wingnuts and kooks. What if someone with an unstable mind loaded a gun and drove to Washington? What if that person went looking for our girls? Donald Trump, with his loud and reckless innuendos, was putting my family’s safety at risk. And for this, I’d never forgive him.”

This is a vivid example of stochastic terrorism at work.

Plausible Deniability is an Essential Part of Stochastic Terrorism

The stochastic terrorist uses inflammatory rhetoric in the full expectation that it will trigger someone somewhere to act out in some way. But there is also plausible deniability built in. The stochastic terrorist can deny that he or she had anything to do with the violence that occurs. Indeed, President Trump falls back on this frequently, including in the aftermath of the bombs sent to people he had criticized. The Washington Post reported,

“Trump told reporters later that he did not think he bears blame for the alleged crimes ‘No, not at all,’ Trump said as he left the White House for a political rally in North Carolina. ‘There’s no blame, there’s no anything,’ Trump said.”

But Why Do People Believe Absurdities?

So why do people believe absurdities, which is a precursor to committing atrocities?

The Pittsburgh gunman believed deeply that Jews were importing refugees to kill “our people.”  There was no evidence that Americans were being killed by refugees. But evidence didn’t matter. There was no evidence that the migrants walking north were infected with smallpox and leprosy, claims repeated frequently by conservative media. President Trump even called members of the Caravan “young, strong men” but also said that they were diseased. Why would people believe such easily refutable claims?

To answer that question we need to recognize that the rise of Donald Trump is not a cause but rather a consequence.

It is the predictable result of decades of degradation of political discourse. This degradation was facilitated by a media more interested in grabbing an audience’s attention than in covering issues.  The worst part is that we should have seen it coming.

In fact, we could have seen it coming if we had known what to look for. We should have known.

Even now as the frightening reality is finally being recognized, we seem to be grappling only with the symptom of the problem — what Trump says — without recognizing that there’s a greater challenge that will continue regardless of how we address the immediate problem.

We can solve the Trump problem but still be as vulnerable to another authoritarian figure who energizes the disenfranchised, the angry, and the scared to similar effect.

Orwell Called It

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In 1946 George Orwell published Politics and the English Language. That brief essay served as the nonfiction treatment for what two years later would become Orwell’s Nineteen Eighty-Four

Most educated Americans are familiar with Nineteen Eighty-Four. This popular novel is based in a dystopian future. The nation is in a continuous state of war. The intrusive and authoritarian government keeps people uninformed, and uses political language that is intentionally misleading. So the Ministry of Peace wages war. The Ministry of Truth controls all information, news, propaganda, and art. The Ministry of Plenty rations food. Our term “Orwellian” refers to the use of language to convey the opposite of reality.

1984first

But most educated Americans are not familiar with the essay that served as the novel’s basis. Sadly, Politics and the English Language helps us understand the current state of the American body politic, and it isn’t pretty.

Says Orwell:

“In our time, political speech and writing are largely the defense of the indefensible.”

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

The problem arises when politicians use language in a disingenuous way, asserting things they don’t necessarily believe and making arguments that may sound compelling but that logically don’t make sense.

“The great enemy of clear language is insincerity. When there is a gap between one’s real and one’s declared aims, one turns, as it were instinctively, to long words and exhausted idioms, like a cuttlefish squirting out ink. In our age there is no such thing as ‘keeping out of politics.’ All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred and schizophrenia. When the general atmosphere is bad, language must suffer.”

However damaging individual instances of political language, of insincere speech, or of intentionally misleading statements may be, it’s the effect of these that causes harm.

The central idea in Politics and the English Language is this:

  • Political speech has the effect of reducing citizens’ critical reasoning skills….
  • …This creates a self-perpetuating cycle…
  • …where as people become less discerning they become more susceptible to political speech…
  • …which further diminishes their critical reasoning skills…
  • …and so on…
  • …and so on…
  • …until a fully uninformed public creates conditions for authoritarian government to thrive.

A Cause Can Become an Effect, And So On: It’s The Cycle That Matters

Presentation4The key idea, though, is the relationship between cause and effect.

Orwell notes that an effect can become a cause, and a cause can become an effect. It’s the cycle that matters. In the end the result is a citizenry that remains intentionally ignorant of the issues that matter, unaware of what is happening to them, and easily manipulated by politicians.

“But if thought corrupts language, language can also corrupt thought. A bad usage can spread by tradition and imitation, even among people who should and do know better.”

“Now, it is clear that the decline of a language must ultimately have political and economic causes: it is not due simply to the bad influence of this or that individual writer. But 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 to drink because he feels himself to be 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.”

The predictable result of this cycle is a citizenry that is easily manipulated. It becomes immune to persuasion by evidence and reasoning. And it doesn’t notice the multiple contradictions all around.

Candidate Donald Trump following the Nevada primary, February 24, 2016


Choosing Ignorance:
Identity-Protective Cognition Thesis

Five years ago Orwell’s argument that political language causes a decline in critical thinking was supported by research by professors at Yale, Cornell, Ohio State, and the University of Oregon.  Their study,  Motivated Numeracy and Enlightened Self-Government, showed that math problems that seem to be about benign topics are easily solved by people with strongly held political views. But when the same math problems are framed in terms of polarized political issues — in this case, gun rights — both progressive-and-conservative-leaning participants have a very hard time getting the math right.

The authors conclude that

“Subjects [use] their quantitative-reasoning capacity selectively to conform their interpretation of the data to the result most consistent with their political outlooks.”

A 2011 essay in Mother Jones by Chris Mooney on the neuroscience of political reasoning helps us understand why this is so.  The piece begins with seminal research from the early fifties by famous Stanford psychologist Leon Festinger, who concluded:

“A man with conviction is a hard man to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point.”

Mooney explains:

“Since Festinger’s day, an array of new discoveries in psychology and neuroscience has further demonstrated how our preexisting beliefs, far more than any new facts, can skew our thoughts and even color what we consider our most dispassionate and logical conclusions.”

“This tendency toward so-called “motivated reasoning” helps explain why we find groups so polarized over matters where the evidence is so unequivocal: climate change, vaccines, “death panels,” the birthplace and religion of the president, and much else. It would seem that expecting people to be convinced by the facts flies in the face of, you know, the facts.”

Emotion Trumps Logic

Humans are not thinking machines. We are feeling machines, who also think. We don’t think first; we feel first. What we feel determines what thinking will be possible. This is sometimes known as motivated reasoning.

As described by Chris Mooney in Mother Jones:

“The theory of motivated reasoning builds on a key insight of modern neuroscience: Reasoning is actually suffused with emotion (or what researchers often call “affect”). Not only are the two inseparable, but our positive or negative feelings about people, things, and ideas arise much more rapidly than our conscious thoughts, in a matter of milliseconds—fast enough to detect with an EEG device, but long before we’re aware of it.”

“That shouldn’t be surprising: Evolution required us to react very quickly to stimuli in our environment. It’s a “basic human survival skill,” explains political scientist Arthur Lupia of the University of Michigan. We push threatening information away; we pull friendly information close. We apply fight-or-flight reflexes not only to predators, but to data itself.”

“We’re not driven only by emotions, of course—we also reason, deliberate. But reasoning comes later, works slower—and even then, it doesn’t take place in an emotional vacuum. Rather, our quick-fire emotions can set us on a course of thinking that’s highly biased, especially on topics we care a great deal about.”

“We have seen this trend for several decades, where for political expediency citizens have been conditioned to not trust any source of news that includes conclusions contrary to those consistent with a political point of view.”

This is likely to be intensified when the news media is seen to be both purveyors of fake news and enemies of the people, two themes President Trump continuously emphasizes. This results in his followers choosing not to believe anything written in such media.

We Apply Fight-or-Flight Reflexes Not Only to Predators, But to Data Itself

Such citizens, who reflexively flee from the facts, are unlikely to be aware of, or even care about, contradictions. Simultaneously holding two contrary positions, the very definition of absurdity, would ordinarily dismiss someone as not to be taken seriously. But in the political world such contradictions seem not to matter.

In such an environment citizens literally are unable to notice absurdities. But the same part of the brain, the Amygdala, that causes the flight response also causes the fight response.  So any intruder is seen to be worthy of a fight.  And violence tends to ensue.

Within a week of Trump calling for a ban of all Muslims entering the country we saw a rash of attacks on mosques and on people perceived to be Muslim or Arab.  We have seen people removed from his rallies while being taunted by Trump from the podium, calling for his supporters to punch the person being removed in the face. In the aftermath of the white supremacist rally in Charlottesville in August, 2017, which President Trump refused to condemn, we saw dis-inhibition in the workplace. People who previously would have kept their racist or anti-immigrant or anti-Semitic opinions to themselves felt emboldened to act out, treating colleagues and customers with insult, rudeness, exclusion, and even violence.

The New York Times reported last month,

“The hate in the United States came into full view last year as white supremacists marched in Charlottesville, Va., with lines of men carrying torches and chanting, “Jews will not replace us.” Swastikas and other anti-Semitic graffiti have been cropping up on synagogues and Jewish homes around the country. Jews online are subjected to vicious slurs and threats. Many synagogues and Jewish day schools have been amping up security measures.

The Anti-Defamation League logged a 57 percent rise in anti-Semitic incidents in the United States in 2017, compared to the previous year — including bomb threats, assaults, vandalism, and anti-Semitic posters and literature found on college campuses.

Are the Calls to Violence Intentional or Merely Reckless?

Plausible deniability is built into the dehumanizing of groups, making it difficult to draw a clear line between a particular act of speech and a particular act of violence. Some, including the president’s allies, could conclude that President Trump is not making such statements with the intention of people committing violence. Rather, he’s speaking his mind and cannot be held accountable if some crazy person takes matters into his own hands.

Contrast today with 10 years ago. Late in his 2008 run for president Senator John McCain saw the crowd crying for blood, and was admonished by people he respected about the likely effect of his rhetoric. He took those admonitions seriously, and he dialed it down. As a responsible leader does.

The book Game Change: Obama and the Clintons, McCain and Palin, and the Race of a Lifetime, by John Heilmann and Mark Halperin, describes Senator McCain’s moment of awakening. Senator McCain and his running mate, Alaska Governor Sarah Palin, had used harsh language to de-legitimize Senator Obama. Governor Palin persistently declared that Obama “palled around with terrorists.”

Game Change reports:

“As the election barreled toward its conclusion, something dark and frightening was unleashed, freed in part by the words of the McCains and Palin. At rallies across the country, there were jagged outbursts of rage and accusations of sedition hurled at Obama. In Pennsylvania and New Mexico, McCain audience members were captured on video and audio calling the Democrat a “terrorist.” In Wisconsin, Obama was reviled as a “hooligan” and a “socialist.

With the brutish dynamic apparently on the verge of hurtling out of control, a chagrined McCain attempted to rein it in. In Minnesota, when a man in the crowd said he would be afraid to raise a child in America if Obama were elected, McCain responded, “He is a decent person and not a person you have to be scared of as president.” A few minutes later, he refuted a woman who called Obama “an Arab.”

 

Senator McCain heard from two of his heroes: civil rights legend Congressman John Lewis, and life-long Republican and former Joint Chiefs Chair and Secretary of State Colin Powell.

Game Change reports:

McCain’s efforts to tamp down the furies were valorous, though they did nothing to erase his role in triggering the reaction in the first place. The civil rights hero John Lewis, whom McCain admired enormously, compared the Republican nominee and his running mate to George Wallace and said they were “playing with fire.”

Civil Rights Legend, Representative John Lewis (D-GA)

Another prominent African American was watching with alarm. Colin Powell had been friends with McCain for twenty-five years. The senator had been actively seeking his endorsement (as had Obama) for nearly two years. Powell warned McCain that his greatest reservation was the intolerant tone that seemed to be overtaking the Republican Party. McCain’s selection of Palin bothered Powell because he saw her as polarizing. He was dismayed by Mc-Cain’s deployment of Ayers as an issue, perceived it as pandering to the right.

And then there were the hate-soaked rallies, which he considered anti-American. This isn’t what we’re supposed to be, he thought.

Powell had leaned toward staying neutral, but these outbursts were all too much—and McCain had moved only belatedly to stop them. Obama, by contrast, had displayed terrific judgment during the financial crisis, Powell thought. And his campaign had been run with military precision; the show of overwhelming force struck the general as a political realization of the Powell Doctrine. On October 19, he endorsed Obama on Meet the Press.

Colin Powell endorses Senator Barack Obama on Meet The Press

The general’s repudiation was a stinging blow for McCain. Beyond their longtime friendship, Powell represented the same brand of Republicanism as McCain’s. Tough on defense. Fiscally prudent. Pragmatic and nondoctrinaire. McCain had to wonder what had become of him if his current incarnation was repelling someone like Powell. He was startled by the crazies at his rallies. Who were they? Why were they there? And what did they see in him? In the final two weeks of the race, McCain began to try to salvage something of his reputation.

He put away the harshest of the personal invective against Obama and went back to talking about the economy, rash spending, and Iraq.”

Leaders Choose Responsibility

Senator McCain saw the unintended consequences of his fiery rhetoric and stopped. As a responsible leader does. Leaders choose responsibility, even if there is not a direct line between what they say and the violence or threatened violence that ensues.

There are two possible conclusions about President Trump’s incitement of violence. Either it is intentional or it is reckless. Either he wants the violence, or he doesn’t care about the violence. Neither absolves him of responsibility. Indeed, it may be even more frightening if the violence is not his intention, but that he is indifferent about it.

The poet TS Eliot gave us a way to understand this.

TS Eliot

He said,

“Half the harm that is done in this world is due to people who want to feel important. They don’t mean to do harm; but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves.”

But whether intentional or merely the result of indifference, the victims of violence experience it as real. And an effective leader would stop.

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Please note: Helio Fred Garcia is executive director of Logos Institute for Crisis Management and Executive Leadership and is on the adjunct faculties of both New York University and Columbia University where he teaches, among other things, ethics. But the views expressed here are solely his own and not necessarily reflective of any other entity.

 

Logos President Co-Authors Crisis Article in Leading Korean Business Journal

Logos Consulting Group president Helio Fred Garcia co-authored an analysis of one of South Korea’s biggest crises of 2016 in Korea’s leading business journal, Dong-A Business Review.

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The analysis was co-authored with Dr. Hoh Kim, founder, head coach, and facilitator at THE LAB h in Seoul, Korea.

Dr. Hoh Kim, founder, The Lab h, Seoul

Dr. Hoh Kim, founder, The Lab h, Seoul

Dr.  Kim, former head of Edelman’s Korea office, is a certified trainer in the Cialdini Method developed by Dr. Robert Cialdini, and a certified coach in the Marshall Goldsmith Certified Stakeholder Centered Coaching method.  Dr. Kim is the primary author of the Dong-A Business Review analysis.

Their article examines the crises surrounding The Lotte Group, one of Korea’s leading industrial conglomerates.  Lotte Group consists of more than 60 business units and employs 60,000 people in such industries as hotels, beverages, candy manufacturing, fast food, retail, financial services, chemicals, electronics, IT, construction, publishing, and entertainment.

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In October Lotte Group’s Chairman, Shin Dong-bin, was indicted on tax evasion, embezzlement, and other charges.  His sister, Shin Young Ja, was arrested several months before for embezzlement and bribery.

Lotte Group is one of Korea’s chaebols, family run business conglomerates, a common form of business organization in Korea.

You can download the complete original Korean language version of the analysis here.

An English translation follows below:


Untitled

The Crisis Management of Lotte

‘A red team’ that challenges a corporation from within is necessary
in the era of ‘reputation management’

Co-authored by

Hoh Kim, Founder, Head Coach & Lead Facilitator, THE LAB h and
Helio Fred Garcia, President of Logos Consulting Group

Published at Dong-A Business Review (DBR), December 2016 Issue 2 (No. 215), pp. 90-94, in Korea

AUTHORS

  • Dr. Hoh Kim graduated from Hankuk university of foreign studies, where he majored in French literature and philosophy. He earned his master’s degree in PR at Marquette university and his Ph.D at Graduate School of Culture Technology, KAIST. He is one of the 19 Cialdini Method Certified Trainers (CMCT) approved and endorsed by Robert Cialdini, the author of Influence: The Psychology of Persuasion.  He has previously led the Korea office of Edelman, a global PR firm and written several books including Cool Apology (co-authored), Cool Survival Kits, Reputation Society (co-authored) and Why I Can’t Say No (all in Korean).
  • Dr. Helio Fred Garcia is the founder of Logos Consulting Group and has more than 35 years of experience in crisis management, executive coaching and consulting. He is an adjunct professor of management in NYU’s Stern School of Business Executive MBA program, where he teaches crisis management. He is the author of  The Power of Communication: Skills to Build Trust, Inspire Loyalty, and Lead Effectively, and is the co-author with John Doorley of  Reputation Management: The Key to Successful Public Relations and Corporate Communication, which was translated into Korean and published as Reputation Management Strategy in Korea by Alma Press in 2016.

 

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ABSTRACT

According to the book Reputation Management Strategy, the formula for reputation is ‘Reputation = (financial) performance + (organizational) behavior + (corporate) communication’. The Lotte crisis has largely been triggered by problems with its organizational behavior. First, ‘an owner risk’ has occurred in leadership behavior and second, in corporate behavior dealing with its customers and business partners, the company led people to believe that it is not an ethical company. Finally, Lotte has failed in communication because there has been a huge gap between its short-term responses, actual leadership behaviors and its nominal long-term vision.

This article offers suggestions for Korean companies that are facing  challenges similar to Lotte’s.

For starters, companies need to get stakeholders to be involved so that they can constantly challenge the companies from the outside. Second, corporations need to have something like ‘a red team’ or ‘a devil’s advocate’ within the organization so that they can bring genuine change to corporate behavior.

ARTICLE

This year the Lotte Group experienced its worst crisis. Here are some questions we need to ask concerning the issue:

  • Q1. How did people first respond to the scandal? Did they say “No, Lotte would never do such a thing” Or did they say “I told you so”.
  • Q2. How would you respond if someone tells you that you are acting just like Lotte?  Would you feel flattered or offended or just regard the comment as neutral?
  • Q3. Lotte has made several promises to reform it. Which one impressed you the most? Do you really believe that the company will keep the promises?

We will explain later why these questions matter for Korean businesses in terms of crisis management. In the meantime we want readers to find the answers to the questions on their own.

For the most part, when we analyze a case, we take a careful look at it as if cameras zoom in. And then we figure out what the problem was and how the problem should have been solved. But in the case of Lotte, one of the authors (Dr. Hoh Kim) thought that when it came to solving the problems there was little Lotte could do in the short term. There were three reasons for this.

  • First, the core of the crisis lay in conflicts among three members of the founder’s family.
  • Second, the founder has failed to smoothly pass down the business to his children, which should have been done over the course of years or decades.
  • Third, it is only the founder and his family who could have prevented these problems.

In this article we’d like to talk about Lotte’s crisis management from a reputational perspective.

In the field of crisis management, there is something called issue index. The index refers to a list of potential issues that might occur to a company in the future. When we were reading news articles about the 2016 Lotte crisis, it almost felt like we were seeing the issue index of Korean conglomerates in general. Of course, how dangerous the problems are and how the issues affect the businesses can be different from company to company.

But it is worth looking into the Lotte case because so many Korean conglomerates share the same kinds problems as Lotte. Conflict over succession and slush funds are a good example.

The authors discussed how we could approach the Lotte case and decided to suggest a common tool that can be applied to other Korean chaebols. (Chaebols are large Korean business conglomerates, mostly family led.)

We believe that it would be helpful to develop ‘a mirror’ that other companies or business people could use to reflect themselves, not ‘a mere window’ through which other conglomerates may just watch and do nothing.  But a mirror to create self-awareness.

Also, with this analysis we’d like to present the last puzzle piece to Korean chaebols that can help them advance their management of crisis and reputation.

One Element in the Reputation Formula that
Most Korean Conglomerates are Missing:

The book Reputation Management Strategy that Dr. Garcia has co-written with John Doorley introduces a reputation formula as below:

Reputation =
(Financial) Performance + (Organizational) Behavior + (Corporate) Communication

The seriousness of the Lotte crisis lies not just in legal risks that it might face but also in a damage to its reputation.

The crisis facing Lotte at the moment is completely different from a crisis that a conglomerate might encounter when it fails to do well in its operations. The current Lotte crisis is highly likely to directly hurt its reputation. So in this case one of the most important crisis-management goals is to recover reputation.

What lessons can the reputation formula offer to Korean Chaebols as a whole as well as to Lotte?

The three elements in the formula are:

    1. Financial Performance
      • Long-Term Performance
      • Short-Term Performance
    2. Organizational Behavior
      • Leadership Behavior
      • Behavior Towards Others
      • Behavior Towards Society
    3. Corporate Communication
      • Tactical and Short-Term Communication v. Strategic & Long-Term Communication
      • External Communication v. Internal Communication

Financial performance, as an element that affects reputation, has two factors: long-term performance and short-term performance. Long-term performance can include profits of the last 10 years or long-term growth potential. Profit for the year is an example of short-term performance. In the case of Lotte, financial performance was not the major factor that affected its reputation.

When it comes to organizational behavior, there are three factors:

  • The first is leadership behavior.
    When the Lotte crisis took place, the behavior of the founder’s family was broadcast almost in real time and not just Lotte employees but also the public were able to learn about it. The conflict among the family members exposed various problems within the chaebol including opaque business practices and governance structure, and succession-related problems. And all these conflicts still remain unresolved. What is unique about founder’s family-related problems is the fact that both the crisis maker and the crisis manager are the founder and his family dynasty. This is a serious problem because it is almost impossible for the employees to take actions to solve the problem. All they can do is simply following orders from the founder’s family.
  • The second factor of organizational behavior is about consumers and business partners.
    This includes how satisfied consumers are with the products and services provided by Lotte and what its partners (vendors) think of working with Lotte.
  • The third factor is about corporate behavior towards society.
    So-called ‘Corporate Social Responsibility’ is a good example of this.  In October, Lotte’s Chairman, Shin Dong-bin, made a public apology and announced reform plans. In the plans, he adjusted the original growth target of increasing its sales to 200 trillion Won (Korean currency) by 2020 and of becoming Asia’s tenth largest company. He then shifted his focus to corporate social responsibility, particularly philanthropy, and said he would put more emphasis on meeting people’s expectation and promoting social values. He stopped short of detailing his plans for fulfilling corporate social responsibility.

In fact, what really matters when it comes to corporations’ social behavior is not philanthropic activities but how companies make profit.

As a matter of fact, in ISO 26000, an International Standard providing guidelines for social responsibility, the word ‘philanthropy’ is mentioned only once. According to the standard, how responsible a company is depends on how much the company contributes to things like human rights, labor practices, the environment, fair business practices, consumer issues and local communities. ISO asserts that corporate social responsibility is about how to make a profit, not about what to do with profit. In other words, to become socially responsible, a company needs to make profit in positive ways. Whether it engages in charitable activities or not is a minor issue. Korean chaebols need to do more in this regard.

Corporate communication, the last factor of the reputation formula, includes both tactical and short-term communication activities like press release and press conference, and strategic and long-term communication activities such as creating corporate missions, visions and values.

Another form of corporate communication includes communication with consumers and the public and communication with employees.  If you go to Lotte’s website(lotte.co.kr), you can find its management policies. The first policy is about transparency and it reads: “we shall promote transparency in our operation and financial performance by tightening self-monitoring systems and strengthening regulatory tools”.

The company also says that it shall put the idea into practice by establishing a system that helps its shareholders understand how the company is doing, by honestly sharing management-related information and decision making and by actively supporting the board of directors and creating a committee that promotes transparent business practices.

One of the core values of the company is responsibility and it reads: “we shall always honestly run the business and contribute to social development by fulfilling our social responsibility. And its action guidelines read: we shall not cover up our mistakes and immediately inform our mistakes and correct them; we shall execute our tasks according to legal, ethical and social standards.”

Lotte is being criticized because there are gaps between its corporate communication and organizational behavior, particularly its leadership behavior.  This Say-Do Gap is the key problem.

One could conclude that Lott’s statements of corporate vision, values and action guidelines are just meant to be framed and hung on the wall. One might also add that in reality no company takes these things seriously.

But stated values create expectations.  And trust rises when expectations are met; falls when expectations are not met.

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If corporate founders ignore the management policies and detailed action plans that they themselves have created, they will face a situation where it is almost impossible to exercise their leadership because they will lose the trust of those who matter to them.

This is the last piece in the reputation puzzle that Korean conglomerates need to improve. Korean chaebols have been able to show world-class business performance through innovation in their products and services. They also have heavily invested in advertising and promotion and have seen great improvement in their corporate communication.

However, they are rightly criticized for failing to make a meaningful change in their corporate behavior, particularly in their leadership and social behavior.  The founders and chief executives of chaebols create ‘great’ visions and values for their companies, but top management themselves often do not take these visions and values seriously. In today’s world, where it is easy to monitor corporate behavior and where stakeholders have easy access to information, organizational and leadership behaviors that haven’t been detected before now can greatly influence corporate reputation.

As we analyzed the Lotte case, we defined the gap among performance, behavior and communication as the fundamental cause for loss of Lotte’s reputation.

Korean chaebols as a whole often have gaps in their business, not just the gap between behavior and communication, but also between performance and communication and between performance and behavior.

So far, when Korean chaebols have faced a crisis as a result of their mistakes and wrongdoings made public, they have done all the same as if there is a formula for such situation: to issue an apology, hold a press conference, take a bow and make some promises.  But, few companies have kept their promises and now few consumers and citizens believe them.

One of the most important jobs of the public relations departments of large companies in Korea has been to stop scandals involving their founder’s family dynasty from spreading. This year Koreans saw massive protests against the government that have been symbolized as candles. In this circumstance one might wonder if Korean conglomerates will be able to continue to make profit (performance) and manage crises and their reputation in the way they have been doing for a long time. Will that be possible without changing their behavior?

The Last Piece of Puzzle:
Will They Change Their Behavior?

The important question that conglomerates, founder’s families, and executives need to ask themselves is whether they are going to change their behavior.

The challenge that Lotte chairman Shin Dong-bin faces now is not to overcome this crisis but whether he changes the corporation’s behavior. If he doesn’t, the company might face another similar or worse crisis in the future.

What can businesses do to change their behavior? We get some ideas from a behavior-change model in the leadership field, not from the crisis-management field.

Dr. Marshall Goldsmith, the world’s leading leadership coach, says that stakeholder engagement is the most important factor in changing corporate behavior. So, for example, if one is to quit smoking, he needs to let his colleagues know about his decision. When around him are engaged they can watch to determine whether he changes his behavior.  As a result, he is more likely to become determined to change. This is part of why many people sign up and go to the gym, or team up with others to exercise. They aim to change their behavior by engaging stakeholders.

In October, Lotte chairman Shin announced reform plans and said that he will establish a watchdog committee that will be directly monitored by him and hire experts from outside. Will this committee be able to lead the conglomerate to change?

To succeed, the committee must be able to act like a red team.

A red team refers to a structure similar to a devil’s advocate — someone who is actually a member of the organization but monitors and points out problems from the opposite point of view in the interest of that organization.

If Lotte has such a committee just for appearance’s sake, the effort is highly likely to fail.

In the beginning of this article, we asked three questions. Now we’d like to explain why such questions matter and what our answers are.
In order for companies to change their behavior, nothing is more important than to figure out exactly how their stakeholders  think of them. In fact, many Koreans have negative perspectives of Korean conglomerates.

If the founders of big corporations or chief executives are to properly manage crises and reputation, they need to understand how those who matter to them view them. When a disaster takes place or when the end of the year is near, chaebols often donate hundreds of millions or even billions of Won (Korean currency) to those in need. They even encourage their employees to perform community services. So big companies often complain that they are unfairly criticized because they actually do many things for communities.

Here’s a question: If chaebols raise their donations by two to three times or perform more community service, will their stakeholders have a better view of them?

We don’t think so, because people’s fundamental ideas of chaebols are negative.  Many take conglomerates’ donations and community service for granted because they believe that chaebols must give some money for the poor at the end of the year because they have done so many bad things all the year round.

What kinds of strategies should conglomerates adopt to effectively manage their reputation and crises? And how should they put the strategies into practice?

In most cases, there are two types of behaviors that chaebols engage in facing a crisis. First, they engage in behaviors that make their negative image worse. Such behaviors include cover-up, lie, evasion of responsibility, denial and even blaming victims — just as recently happened when a daughter of Korean Air Line’s chairman threw a fit, angrily insisting that a plane she was on return to the gate of an airport. These kinds of behaviors reinforce consumers’ negative views of chaebols.

The other type of behavior is the ones that contrast sharply with people’s negative perspectives. For instance, the public  found it surprising when a daughter, not a son, of the founder’s family of a big company had joined the navy as a naval officer. The public knew that the decision was not made to improve the image of the company but still found it pleasantly surprising.

Also, when Korea was hit by the Middle East Respiratory Syndrome pandemic (MERS),  Samsung’s Vice Chairman JY Lee conceded his company’s fault and sincerely apologized to the public. This gave the public an opportunity to fix their negative perceptions towards chaebols because most people thought that chaebol owners would deny their responsibility when a crisis takes place.

Of course, if Korean conglomerates are to overcome crises and transform their image, they need to do more than just create a temporary surprising event. Corporate founder’s family must be determined and engage in consistent “surprising behaviors.”

Protesters holding candles are calling for change not just within the government. They are sending a strong signal that there must be a paradigm shift in chaebols’ management of crisis and reputation.

The public is calling for change in corporate behavior. We each have public relations experience and have long worked in crisis management and strategy communication consulting. The conclusion that we want to share with readers is clear: If one approaches crisis and reputation management from the perspective merely of public relations, one is bound to fail.

Food for Thought

      1. What kinds of images do publics have about my company? Apart from the products and services that my company provides, how do publics think of my company? Do they think of it as the one that coexists with, is mutually beneficial with and contributes to society? Or as evil? If the latter, why is that? What are your solutions to fix the image?
      1. It is difficult to improve corporate reputation merely by engaging in some corporate social responsibility efforts and philanthropy or by handing out some corporate leaflets. To get positive reputation, the entire company needs to make an effort to create social value, and this approach should be the center of  profit-making process. The reason why this approach matters is the reason why the CSV (creating shared value) strategy matters. Does my company take CSV seriously? Does it have a team that puts the idea into practice?

 

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Note:

Reputation Management: The Key to Successful Public Relations and Corporate Communication, by John Doorley and Helio Fred Garcia, was originally published in 2007.  It is now in its Third Edition in English.  A Korean translation was published as Reputation Management Strategy in 2016.  A Chinese edition is scheduled to be published in early 2017.  A French language edition is now underway, due to be published in late 2017.

John Doorley is a Visiting Associate Professor at Elon University in Elon, North Carolina, and a Director in Mindful Reputation.  He is a founding academic director of New York University’s MS in Public Relations and Corporate Communication.

Dr. Hoh Kim and Helio Fred Garcia began working together in September, 2015 when Dr. Kim was the moderator and Mr. Garcia was a keynote speaker in the Chosun Issue Forum, a conference on crisis management in Korea sponsored by Chosunilbo, Korea’s leading newspaper.

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Dr. Hoh Kim, left, moderating a panel discussion at Chosun Issue Forum, Seoul, September, 2015

Worth Reading, Feb 27, 2012

We’re back from a Presidents Day break last week (and, well, for me from being very under the weather as well).

Apology Update: Public apology is a five-note chord.

Recent public apologies from Goldman Sachs’ CEO Lloyd Blankfein and Tiger Woods made me wonder why we accept some apologies and denounce others.
Which components of a public apology show us that it is authentic and sincere and, therefore, that we can accept it? Is there a perfect public apology?

Goldman Takes The Lead

When Goldman Sachs’ CEO Lloyd Blankfein issued a public mea culpa, his goal was to convince the public that he accepted responsibility for and deeply regretted his firm’s role in the financial crisis. As a form of restitution, he offered to have Goldman invest $500 million over five years to help small businesses. Mr. Blankfein’s was the first official apology by an investment bank of that caliber, which is by itself a unique occurrence. And yet, Goldman’s apology caused a mixed reaction.
Some stakeholders gave the company credit for taking the initiative to apologize and for its willingness to help small businesses. Most others, including the general public, questioned the sincerity of the apology and its real value. The media called it a “faux apology”, a “non-apology”, a “hollow apology”, and an “unspecified apology.” The author of Mean Street blog (WSJ) Evan Newmark called it a “big PR exercise” that is “so sequenced and packaged that it’s bound to come across as disingenuous, even deeply cynical.
The negative public reaction was caused mainly by the apparent disconnect between Goldman’s carefully calibrated message and real issues that the company still needs to fix if it is to restore public trust and earn forgiveness.

Tiger One Over Par
Tiger Woods’ attempts to apologize also caused a mixed public reaction.
On November 27, 2009 Woods crashed his car into a fire hydrant near his house. After the incident brought to light many affairs, Woods posted two separate apologies on his website, several days apart.
After the first apology mainstream media, bloggers, vendors, corporate sponsors, and the golf community expressed major disappointment and dismay at Woods’ behavior and did not accept his apology as sufficient. Woods’ story caused a lot of debate even among the apology experts. The only stakeholders who showed support were his fans. Most of them accepted his apology, demonstrating higher tolerance for his personal failings.

Woods’ second apology was more successful and resulted in mostly positive reviews among his fans, critics, media, the golf community etc. It could have been even more effective if the athlete had come clean earlier and had delivered the apology in person rather than on his website.

Why Didn’t the Apologies Work?

Why didn’t people believe Goldman Sachs CEO’s apology? Why did Woods’ first apology reach his fans but did not convince others? Why did his second apology result in more positive reaction among his stakeholders?
What type of public apology do people need to hear to be able to believe it and accept it?
The authors of “The Five Languages of Apology,” Gary Chapman and Jennifer Thomas, might have an answer. Read more

When Rumors Have Legs

It was like a bad game of telephone. An old Chicago Tribune article about United Airlines filing for bankruptcy protection in 2002 either did or didn’t reappear on the Web site of the South Florida Sun-Sentinel newspaper last weekend. United says it did, the Sun-Sentinel says it was an old archived story that was mistakenly picked up by Google as a new story after it appeared in its “Popular Stories” section. (Read Google News’ explanation here.) A research firm, Income Securities Advisors, found the story when it did a search on bankruptcies. The research firm then posted it on Bloomberg News, thinking it was breaking news.

Innocent mistake? Well, instead of mishearing the details of the weekend from a friend of a friend of a friend (and no one being the worse for wear), the airline suffered a nearly 75% loss of the value of its stocks in less than an hour before trading was halted on Nasdaq. The stock ended up mostly rebounding by the end of the day – once United corrected the reports and trading resumed – but still closed at a loss.

Everyone is now pointing fingers, and the SEC has begun an “informal investigation” into the matter. Read more