Logos President Discusses Elon Musk, Leadership, and Temperament on CNBC Power Lunch

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Logos Consulting Group president Helio Fred Garcia was interviewed on CNBC’s Power Lunch on Thursday, May 3, 2018, on the implications of Tesla CEO Elon Musk’s intemperate comments on an earnings call with investors the previous day.

In that call, among other things, Mr. Musk responded to an analyst’s question about future capital requirements with the comment,

“Excuse me. Next. Boring bonehead questions are not cool,”

That and similar statements caused Business Insider senior transportation correspondent Matthew DeBord to write,

“I’ve listened to a lot of earnings calls with automakers and more than my fair share of Tesla calls presided over by CEO Elon Musk with a mixture of cheerleading and contempt. On Wednesday night, after Tesla reported its first-quarter results, I was treated to easily the most bizarre Muskian performance yet.”

In the aftermath, CNBC Power Lunch invited Garcia to come on the air and offer an analysis of the leadership issues at play.

He was asked by co-anchor Tyler Mathison whether Mr. Musk should hire a top operational executive.  Garcia replied,

“What we saw yesterday was a symptom of a bigger problem. And that is, a tendency of brilliant people to assume that brilliance is enough, where temperament is a necessary ingredient to being an effective leader.

We see that with many companies that are founded by brilliant people who have an inspiring vision and who create disruptive companies, But there comes a point in the life of the company where that isn’t enough. We are seeing that with Mr. Musk.”

Asked whether we’re at that point with Tesla, Garcia responded,

“We are certainly seeing repetitions of the same symptoms, And the symptoms suggest a temperament that doesn’t take seriously the burdens that a leader needs to undertake to run a complicated company after a certain point.

We saw that, for example, with Mr. Jobs in his first incarnation at Apple. We saw that just last month with Mark Zuckerberg when there was a need for leadership in the aftermath of the Cambridge Analytica scandal but we got a technocrat. We need a good combination of inspiration and temperament and what we’re seeing now is an over-weighting of the inspiration and brilliance and an under-weighting of the temperament.”

Co-anchor Sara Eisen noted that some investors love Tesla because of Mr. Musk and his vision, and others hate Tesla for lack of attention to important operational issues. She asked, which is more important.  Garcia responded,

“It has to be a blend.  We’re actually seeing the same phenomenon in the political environment as well. Not to talk about politics, but we see the same symptoms. Where we need the right blend of temperament and vision. And one of the challenges with some of the smartest people in the room is they tend to not respect the people whom they consider to less smart than they. As a result we get derisive language toward a stakeholder group that is critically important for the success of the company, be it investors, or employees, or regulators, or others.

And we saw a similar response to a question to the President last week, when he said ‘That’s a stupid question.’ The derision shown to people who have legitimate concerns is what’s going to lead to loss of trust

You can see the whole interview here:

Musk’s temperament not right to be CEO: Expert from CNBC.

In addition to his client work through Logos Consulting Group Garcia is an adjunct professor of management at NYU’s Stern School of Business Executive MBA program, where he teaches crisis management. He also teaches crisis communication in NYU’s School of Professional Studies MS in Public Relations and Corporate Communication.  He is also an adjunct associate professor in Columbia University’s Fu Foundation School of Engineering, where he teaches crisis management, ethics, and leadership in the Professional Development and Leadership Program.

Garcia is the author most recently of The Agony of Decision: Mental Readiness and Leadership in a Crisis, available in both paperback and as an e-book from Kindle here.

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Holly Helstrom Guest Lectures in NYU’s Masters Program in Public Relations and Corporate Communication

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On Saturday April 28, 2018 Logos Institute for Crisis Management & Executive Leadership fellow Holly Helstrom guest lectured for the second time in an advanced elective on crisis communication taught by Logos Institute executive director Helio Fred Garcia.

Ms. Helstrom spent the afternoon discussing with students the perils and opportunities presented by social media to organizations facing crises. She walked the students through a number of compelling case studies that demonstrate this dual nature, including two separate case studies involving Starbucks; one that demonstrates how the permanency of what gets shared on the Internet can be a continuing challenge for organizations, exemplified by a rumor dating back to May 2004 that was still being repeated on Starbucks’ Facebook page as recently as November 2017. The other illustrated the effectiveness of a compassionate, human tone in crisis response as demonstrated by CEO of Starbucks Kevin Johnson’s video apology to the two men wrongfully arrested last month at a Philadelphia Starbucks store. Johnson was widely praised for his apology and as a result able to protect Starbucks’ stock from further avoidable harm. Juxtaposed with a case study on CEO of Facebook Mark Zuckerberg’s (five days delayed) response to the Cambridge Analytica crisis – and subsequent damage to Facebook’s stock price – the case studies were powerful enhancements to the students’ learning experience.

The main point of the lesson was how social media can be tremendously harmful – or helpful – to organizations in their crisis response efforts. But just like crises themselves, to the degree it is harmful or helpful is contingent on how the organization and its leadership decide to act.

Ms. Helstrom’s other research areas of interest at the Logos Institute include gender and leadership, and the intersection of ethics, society, and technology.

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Logos President Quoted by Major Media on Facebook’s Crisis Response Failure

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Logos President Helio Fred Garcia was quoted extensively by major media in the March/April 2018 timeframe about Facebook’s ineffective crisis response regarding Cambridge Analytica’s misuse of Facebook users’ data.

The crisis broke Friday evening, March 16, and Facebook’s initial response was muted and legalistic.  Between Friday night and Tuesday morning Facebook stock was down 9 percent, losing more than $50 billion in market value.

Garcia was quoted first by Bloomberg View’s Kara Alaimo. In her piece, titled “Facebook’s PR Crisis Is a Mess of Its Own Making – Transparency is the best policy for one simple reason: The truth always comes out,” Alaimo says,

One reason Facebook may have decided to withhold the information for so long is that it was trying to figure out how to prevent such episodes from happening again. However, companies don’t need to resolve a problem fully before they disclose it.

 

Helio Fred Garcia, president of the Logos Consulting Group and author of “The Agony of Decision: Mental Readiness and Leadership in a Crisis,” says that a company determining how to address a crisis should ask itself this question: “What would reasonable people appropriately expect a responsible organization or leader to do when facing this kind of situation?”

She added,

Reasonable people wouldn’t expect a company that just learned that its data has been improperly shared to have developed a full plan within minutes to prevent such a situation from recurring. They would, however, expect the company to be transparent, express remorse, pledge to take action to prevent the problem from happening again, and follow up with an announcement about what it was doing to solve the underlying issue. If Facebook had done this, it wouldn’t be dealing with the mess it’s in today.

Garcia was also interviewed by the Associated Press. In its story titled “Crisis Management: What Not to Do,” appeared initially in The Washington Post.

The AP story says,

The point is to at least make an effort to seem remorseful to win back public trust, experts say. But despite user outcry on its own Facebook page and a call from Congress for Zuckerberg to testify about Facebook’s role in election-meddling, Facebook seems to be charting its own course.

 

It’s a pattern Facebook has long followed, said Helio Fred Garcia, a professor of crisis management at NYU and Columbia University in New York. Facebook hedged during its early days in 2007 over a controversial advertising program called Beacon that did not alert users it was sharing their activity, and it did so again in its response to Russian bots hijacking Facebook ad software during the Trump campaign in 2016.

 

“Facebook has been too late. Facebook has done too little and has been too legalistic’ each time, Garcia said. ‘I have yet to find a crisis Facebook handled that I could stand in front of crisis management classes and say, ‘Here’s an example of how to handle a crisis.’ They’ve never been able to handle a crisis.”

 

Once Zuckerberg addresses the public, the PR flap may eventually be forgotten. But it will take a lot longer than if the company had addressed public concerns immediately, Garcia said.

 

“It’s much harder to restore trust once it has been lost than to preserve trust before it has been lost,” he said.

About an hour after the original AP story appeared, Mark Zuckerberg, CEO of Facebook, released his first written public comment. The AP interviewed Garcia for his reaction, and then updated its story to include Mr. Zuckerberg’s statement and Garcia’s comments on it.

“My biggest skepticism is that we’ve seen this play before,” said Helio Fred Garcia, a professor of crisis management at NYU and Columbia University in New York. “They’re caught coming short of customers’ privacy expectations. They tweak procedures. But they  don’t seem to learn from mistakes, don’t really seem to care.”

That night Mr. Zuckerberg made his firs personal public statement, on an exclusive interview on CNN. You can see the entire interview here. The Associated Press asked Garcia to comment on the interview. It reported:

“On Wednesday, the generally reclusive Zuckerberg sat for an interview on CNN and conducted several more with other outlets, addressing reports that Cambridge Analytica purloined the data of more than 50 million Facebook users in order to sway elections. The Trump campaign paid the firm $6 million during the 2016 election, although it has since distanced itself from Cambridge.

 

Zuckerberg apologized for a ‘major breach of trust,’ admitted mistakes and outlined steps to protect users following Cambridge’s data grab. His mea culpa on cable television came a few hours after he acknowledged his company’s mistakes in a Facebook post, but without saying he was sorry.

‘I am really sorry that happened,’ Zuckerberg said on CNN. Facebook has a ‘responsibility’ to protect its users’ data, he added, noting that if it fails, ‘we don’t deserve to have the opportunity to serve people.’

While several experts said Zuckerberg took an important step with the CNN interview, few were convinced that he put the Cambridge issue behind hm. Zuckerberg’s apology, for instance, seemed rushed and pro forma to Helio Fred Garcia, a crisis-management professor at NYU and Columbia University.

‘He didn’t acknowledge the harm or potential harm to the affected users,” Garcia said. “I doubt most people realized he was apologizing.’

The next morning Canadian Broadcasting Corporation News interviewed Garcia and asked him to grade Mr. Zuckerberg’s apology.

Garcia said,

‘The most charitable grade I can give Mr. Zuckerberg for last night’s interview would be a B-minus. But it’s in a context where an A was necessary to get out of the mess that he is in. That interview called for leadership and confidence and commitment. And we got something just short of that.’

Regarding the apology itself, I’m really sorry that this happened, “Garcia said,

‘When I heard that I said, Gosh, I hope that’s the only time we hear Sorry in this interview. Because he didn’t say what he was sorry for, he didn’t say whom he was sorry to, he did not say it in a manner that suggested regret or remorse. He suggested it in a way that he seemed to be getting through it and checking off a box.  Even the word ‘sorry,’ he swallowed the word when he pronounced it. Someone would have been forgiven for not noticing the apology. And he didn’t repeat it later in the interview.’

Asked about testifying before Congress, Mr. Zuckerberg said that he’d testify to Congress if it was the right thing to do, but that his inclination was to send the person at Facebook who had the most detailed knowledge on the topic that Congress wants to speak about. And that if that were him, he’d be happy to testify. Asked what he heard in that statement, Garcia said,

‘I heard an opportunity where a leader is needed and instead we heard from a technocrat. The burden of leadership is to represent the company to those who matter the most… The leader’s duty is to represent the company.  He is speaking as if it’s about an exchange of knowledge, but Congressional testimony is about leadership accountability, and that’s what was missing here.’

Asked about Facebook’s response to the crisis, Garcia said,

‘One of my criticisms of Facebook in general is that we’ve seen this play before. We saw it eleven years ago with their first first big crisis involving a product called Beacon, where the pattern was silence, then, oh, it’s not that bad, and then an apology and then a tweaking of procedure.  We saw it again after the Federal Trade Commission fined Facebook for privacy violations. The same pattern: Silence and then acknowledgement and then a kind of apology and then a tweak in procedures. We saw it after the Russian advertising in the American political process scandal last year.

 

This pattern happens again and again.  I give them credit for saying ‘We got it wrong.’ I give them credit for saying ‘We’ve got to get it right.’ That’s why it gets to a B-minus.  But the idea that 50 million customers had their information compromised and that Facebook knew about it three years ago, and only now commits to notify those who were affected that they may have been affected, that is a failure. It is a failure of leadership and a failure of responsibility.’

You can watch the entire interview here.

The following week, on March 27, Garcia was interviewed live by Canada’s CTV News on what Zuckerberg apparent hesitation to commit to testify before a Senate committee on April 10, two weeks later, but rather offering to send Facebook technical experts instead.  Garcia said,

‘This is a moment that calls for leadership.  But Mr. Zuckerberg is behaving like a technocrat. It is the duty of the CEO to represent the company to all who matter. And a parliamentary hearing, a congressional hearing, calls for a leader to be there, for the boss to be there. Congressional hearings are not about a transfer of knowledge. Congressional hearings are about accountability and and responsibility. Now if Mr. Zuckerberg were to show up with his technical experts, that would be fine. But he seems to be evading an important responsibility of being the CEO.’

Asked what the hesitation could be about and whether Mr. Zuckerberg would be getting counsel from lawyers, Garcia said,

‘I would assume that that’s the case. One of the things we know is that congressional hearings aren’t merely about public policy. They are also about politicians using the bully pulpit of a congressional hearing to show themselves to be tough, and to be tough on companies that are seen to be behaving inappropriately. And can see the human impulse to want to avoid that kind of embarrassment, but that’s the one of the burdens of leadership, to face into the difficult situations.  The idea that he would not appear in front of a congressional committee when his stock has lost already more than $100 billion in value, when customers are worrying about whether Facebook has misappropriated their data, these are all very concerning things and he is not behaving the way a CEO is supposed to behave.’

He was asked whether this is the beginning of the end, and whether the world could continue without Facebook, Garcia replied,

‘The company has made the wrong choice at every turning point since the crisis began. And the crisis began three years ago when they discovered that 50 million customers had their information misappropriated and chose not to notify those customers. They didn’t commit to notifying those customers until a week ago. The company is facing a critical turning point. There was a time when I couldn’t live without Blockbuster Video. That time has passed. There was a time when I couldn’t live without Borders bookstore. That time has passed. And it is completely within the control of the leaders at Facebook whether Facebook remains relevant and trusted. But for that they are going to have to step up in this turning point because if they fail to step up someone will build a better mousetrap and people will move to a different platform.

You can see the entire interview here.

On Sunday, April 1, the Associated Press quoted Garcia on the preparation Mr. Zuckerberg would likely need to do before his scheduled April 11 testimony. As it appeared in Mr. Zuckerberg’s hometown newspaper, The San Francisco Chronicle, the story quoted and paraphrased Garcia as follows:

“Helio Fred Garcia, who as president of Logos Consulting Group has prepped unnamed banking, pharmaceutical and other executives, said a CEO client of his went through a mock hearing in which someone said very harsh things to rattle him. He was shown video of his expression to make sure he wouldn’t replicate it in front of the Senate. The verdict? ‘He kept his job, so it went fine,’ Garcia said.”

It added,

“CEOs may be used to getting their own way, but they aren’t in control during hearings. Garcia said that can cause them ‘a great deal of distress.’

Zuckerberg has to understand he’s a target and swallow his pride. His job isn’t to try to persuade the senators of anything, but to let senators express their anger.

‘This isn’t an educational forum,’ Garcia said. ‘It’s a highly ritualized piece of theater.’

It continued,

“At the same time, Zuckerberg can’t get too bogged down in technical explanations, Garcia said. A hearing puts the spotlight on leadership and accountability, not technical details. Garcia said Zuckerberg has to ‘speak in leadership terms: ‘This was a massive failure and I apologize.””

April 11, the day of the Senate hearing, Garcia was again quoted by Associated Press.  As appeared in the New York Times and Washington Post, Garcia was quoted assessing Mr. Zuckerberg’s testimony as follows:

[The senators] allowed Zuckerberg to repeat his talking points — that Facebook doesn’t own or sell users data, that he and other senior executives weren’t proactive enough with Cambridge Analytica but they’ve changed that, and that using artificial intelligence in elections to stop fake accounts is a top priority.

The result?

“He’s giving the same responses to the same questions from different senators,” said Helio Fred Garcia, a professor of crisis management at NYU and Columbia University in New York.

Zuckerberg seemed often to retreat to three “safe havens,” Garcia said:

One, diffusing responsibility to his “team.”

Two, when pressed on policy issues, agreeing to a principle without committing to details.

And three, never failing in answering questions to start by addressing the questioner as “senator” or “congressman.”

“He’s diligent in showing deference and respect,” Garcia said.

In addition to his client work through Logos Consulting Group Garcia is an adjunct professor of management at NYU’s Stern School of Business Executive MBA program, where he teaches crisis management. He also teaches crisis communication in NYU’s School of Professional Studies MS in Public Relations and Corporate Communication.  He is also an adjunct associate professor in Columbia University’s Fu Foundation School of Engineering, where he teaches crisis management, ethics, and leadership in the Professional Development and Leadership Program.

Garcia is the author most recently of The Agony of Decision: Mental Readiness and Leadership in a Crisis, available in both paperback and as an e-book from Kindle here.

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Logos Publishes E-Book on Crisis Communication Best Practices with Leading Media Monitoring Firm Critical Mention

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Logos Consulting Group is pleased to announce that it has authored a brief e-book on best practices in crisis communication for public relations professionals that was published by the media monitoring firm Critical Mention.

The e-book is part of Critical Mention’s series on Resources for Public Relations Professionals. Critical Mention has been a key resource for professional communicators since 2002, providing near real-time media monitoring across online, social media, radio and broadcast coverage to help professionals excel at what they do. Professional development has become part of Critical Mention’s mission.

Chris Cunniffe, Digital Marketing Director at Critical Mention notes, “We aim to provide relevant content to encourage career growth for our customers. Plus, we help them identify and measure their success—because their success is our success.”

The Primer on Crisis Communication for PR Professionals is an adaptation of the book The Agony of Decision: Mental Readiness and Leadership in a Crisis by Logos president Helio Fred Garcia.

Garcia said, “I applaud Critical Mention for its commitment to professional development of its customers. Logos is also committed to helping leaders in all fields plus those who advise them, including public relations professionals, to be more effective with their communication strategy. We welcome the opportunity to share our insights in this new forum.”

The primer is available for download free of charge here.

The Agony of Decision is about how leaders and the organizations they lead can maintain reputation, trust, confidence, financial and operational strength, and competitive advantage in a crisis. It is written for leaders across sectors and at all levels of leadership, including those who advise those leaders, whether in public relations, law, or other business disciplines. The primer will support these leaders in three ways: 1) help them understand the dynamics of crises; 2) help them to make smart decisions in a timely way; 3) support the stewardship of reputation management, trust building, and the advancement of competitive advantage.

The Agony of Decision has been adopted in graduate level crisis courses in the NYU M.S, in Public Relations and Corporate Communication program and Executive MBA program, and is also being used in a number of other universities and at schools affiliated with the U.S. military. The book is the first installment of the Logos Institute Best Practices Series.

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2018 Leadership and Crisis Preview: The Importance of Humility

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2017 is a year defined by arrogance.

Arrogance in national affairs, as the president and his senior staff persistently refused to acknowledge any facts that failed to align with their world view, and attacked those who dissented as purveyors of “fake news.”

Arrogance in business, as we saw Pepsi mishandle an ad alluding to the Black Lives Matter movement, and then be surprised by the backlash before pulling the ad. And then it bungled its apology, in a remarkable display of victim confusion, by apologizing to the ad’s star, reality TV personality Kendall Jenner.

And arrogance as United Airlines’ CEO failed initially to express empathy for a passenger who had been assaulted and severely injured by Chicago Aviation Authority security officers removing him from a plane.

Whisper Networks No More

And we have begun to see the consequences of arrogance in professional relationships, particularly the sexual entitlement of powerful men toward others in subordinate positions. This was brought to the fore initially by a New York Times expose in October of movie mogul Harvey Weinstein’s decades of systematic sexual abuse. The sexual misconduct of dozens more prominent men in entertainment, politics, business and journalism was revealed in the weeks following. The year ended with news that a two-star U.S. Army general had his nomination for a third star withdrawn as a consequence of treating a female congressional staffer disrespectfully in October.

The year saw backlash to this pervasive arrogance of male leaders in the form of the #metoo movement, a hashtag used on social media by victims of sexual misconduct to empower each other to stand up to their abusers, and find solace in their shared experiences. Just about every woman I know has disclosed that at least once in her life she has been the victim of sexual abuse or harassment, at work or otherwise. Time magazine put some of the women who came forward, whom it dubbed “The Silence Breakers” on its cover as 2017 person of the year.

What these various crises and scandals have in common is a particularly pernicious form of arrogance: a sense of entitlement; an inability to see others as worthy of respect and dignity; a failure of empathy. But mostly they reveal a lack of humility.

The Need for Humility

Humility isn’t a word we often see in business. Humility all too often is interpreted as weakness, especially in competitive cultures like Wall Street, politics, or the top of big organizations.

But in  2018, the best leaders will exhibit humility; the best-handled crises will be those where humility prevails.

One of the common patterns in mishandled crises is the absence of humility. Such bungled crises reflect what my friend, America’s Crisis Guru® Jim Lukaszewski, calls “testosterosis,” which he labels as a “powerful and hugely costly affliction.” He defines the affliction this way:

“Testosterosis: Men and women both have it. It’s that state of extraordinary irritation and agitation when something goes awry which makes us want to lash out rather than fess up; to slap a few folks around to see what happens; an agitated state caused by adverse circumstances which we regret about the time it begins, but is most often one of the things leaders, lawyers and other top people wind up apologizing for.”

But a little humility can prevent testosterosis.

A dollop of humility tempers other attributes, and makes a leader even stronger. Humility helps a leader to recognize that maybe – just maybe – he or she might be wrong; that there may be other valid perspectives; that he or she doesn’t have to be the smartest person in every room, at every meeting; that he or she doesn’t need to prevail in every disagreement.

The best leaders take responsibility in a crisis by using what Good to Great author Jim Collins describes as the paradoxical combination of humility and fierce resolve. He admonishes that humility must not be mistaken as weakness. He notes that the most effective leaders are a study in duality:

“…modest and willful, shy and fearless. To grasp this concept, consider Abraham Lincoln, who never let his ego get in the way of his ambition to create an enduring great nation… Those who thought Lincoln’s understated manner signaled weakness in the man found themselves terribly mistaken.”

Emotional intelligence guru Daniel Goleman, in a Harvard Business Review article “What Makes a Good Leader?,” identifies self-awareness as the preeminent leadership skill:

“People with a high degree of self-awareness know their weaknesses and aren’t afraid to talk about them.”

He notes, however, that many executives mistake such candor for ‘wimpiness.'”

Pope: Power Without Humility is Dangerous and Self-Destructive

Indeed, Pope Francis, in a TED Talk recorded in April, 2017, noted that humility is not weakness; rather, it is a kind of fortitude.

He said,

“Please, allow me to say it loud and clear: the more powerful you are, the more your actions will have an impact on people, the more responsible you are to act humbly. If you don’t, your power will ruin you, and you will ruin the other.”

The Pope used a metaphor to illustrate the consequence of having an imbalance of humility and resolve:

“There is a saying in Argentina: ‘Power is like drinking gin on an empty stomach.’ You feel dizzy, you get drunk, you lose your balance, and you will end up hurting yourself and those around you, if you don’t connect your power with humility. Through humility… power… becomes a service, a force for good.”

Humility Enables Empathy

Humility is what makes empathy possible.

Humility helps leaders to connect with others up, down, and across the chain of command; to build organizations and cultures that are more likely to thrive; to understand the perspectives of other stakeholders. The best leaders have a temperament that blends both power and humility that allows them to create a culture of accountability in all directions.

The end of 2017 revealed a powerful example of effective leadership as the tempering of power with humility.  As covered by military.com, the Commandant of the United States Marine Corps, General Robert Neller, was addressing troops in Afghanistan just before Christmas.

U.S. Marine Corps Commandant General Robert B. Neller

He told of the time as a one-star general commanding Marines in Iraq in 2006 he acted grinchy because he was away from his family at Christmas. He initially exhibited some testosterosis:

“It was was Camp Fallujah, it was cold, it was wet, rainy… I just got up in the morning… Overnight they had put up all the Christmas stuff, and Frosty the Snowman, and Santa Claus, Rudolf, and little trees and lights, and I’m like, [shouting] Who did this? Why are you doing this? I don’t want to be here for Christmas. And this is reminding me that I’m here. Take it all down!”

That could have been it. He was the boss, a general, addressing subordinate staff, in a war zone. But what happened next is remarkable. General Neller recounts,

“And this female sergeant, name escapes me, maybe 5 foot 1, stands up and says, ‘General, you need to knock that sh*t off. I don’t want to listen to any of that whiny sh*t. We’re here, it’s Christmas, we’re your family, you’re not going to be home, so suck it up… Sir!'”

General Neller was taken aback.  He stood silently:

“And I kind of stood there [pause]… didn’t quite know what to say [pause]…  looked at my boots [pause]… and I raised my head and said, ‘Yes, Ma’am, you are correct. I am sorry. This is my family for Christmas. And I will do my very best to have as good a Christmas as I can.'”

This expression of humility, this acknowledgement of his initial failure, this apology and acknowledgment of the rightness of the sergeant’s admonition, is an extraordinary demonstration of leadership. It is also remarkable that despite the disparity of rank and power the sergeant felt empowered to address him directly. General Neller had created an environment in which accountability in the form of such push-back was appropriate.

You can see General Neller tell this story here.

Humility as a Leadership Discipline

This ability to understand the perspectives of stakeholders is critical to being an effective leader and to getting through a crisis effectively.

Finally, humility recognizes that there’s a big difference between responsibility and blame; that taking responsibility regardless of where the blame may lay down the organization is a first step in getting people to focus on a solution rather than simply point fingers.

As we begin 2018, we can look for and notice examples of effective and ineffective leadership and crisis response. My prediction: Humility will mark the best leaders and the best handled crises.

Happy New Year!

Note: The principle of humility as a leadership discipline is covered more deeply in my latest book, The Agony of Decision: Mental Readiness and Leadership in a Crisis.

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Logos Institute for Crisis Management & Executive Leadership Presents Inaugural Outstanding Leader Award to James E. Lukaszewski

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On Thursday, November 16th, Logos Institute for Crisis Management & Executive Leadership gathered with nearly 50 communication industry guests to celebrate James E. Lukaszewski, “America’s Crisis Guru”®, as he was honored as the inaugural, 2017 recipient of the Logos Institute for Crisis Management & Executive Leadership Outstanding Leader Award.

The Outstanding Leader Award recognizes established industry professionals for their consequential professional achievements that set the aspirational standard for others, and the recipient’s excellence in the use of strategic communication to achieve professional or business objectives with substantial and positive results. Recipients also possess the impressive ability to inspire and empower others through their status as role models, trusted advisors, and visionaries.    

Jim Lukaszewski, President and Chairman of the Board of The Lukaszewski Group Inc., is a highly regarded leader in crisis management and strategic communication. For more than four decades he’s helped senior leaders facing crisis get through challenges with focus, ethics, and decisive action. In addition to being an advisor to those “at the top,” Jim has dedicated much of his career to sharing his wisdom and time with students and young professionals only starting their careers. He remains, in fact, a mentor to Logos President Helio Fred Garcia, and inspired much of what developed to be the Logos Method. With 13 books and hundreds of articles and monographs authored, his mentorship and leadership influence have easily touched many thousands.

(James E. Lukaszewski, 2017 Outstanding Leader Award recipient)

Jim began his illustrious career working as the assistant press secretary to the governor of Minnesota, then as deputy commissioner for the Minnesota Department of Economic Development, before starting his first crisis management firm in 1978 with the help of his wife Barbara; the firm was acquired by a larger PR firm five years later. In 1986, Jim moved to New York to work as a crisis consultant under the tutelage of Chester Burger, a mentee of Edward L. Bernays, also known as the Father of Public Relations. “One of the greatest talents Jim has is that he knows how to listen; that is hard to do when you know the answer,” said Burger ( Barnes, 2009,  Living Legends in Public Relations).

(President of Logos Consulting Group Helio Fred Garcia presenting the award to James E. Lukaszewski)

Ever dedicated to his clients and the industry, Jim served for 22 years on the Public Relations Society of America’s Board of Ethics and Professional Standards (BEPS) and became its first Emeritus member. His list of recognitions is long and the gratitude of clients and mentees is deep.

“The reason I do what I do is simple,” says Jim. “I want to have an important, constructive impact on the lives of people and organizations I help. My ultimate goal in working with other PR professionals or staff members is to help them learn to have happier, successful, and more important and influential lives” ( Barnes, 2009,  Living Legends in Public Relations).

Please join us in honoring Jim for his distinguished service and achievement.

To watch the award ceremony, please click here

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Logos President Launches Crisis Management Elective at Columbia Engineering

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Logos Consulting Group is pleased to note that Logos President Helio Fred Garcia has launched a new elective, Advanced Leadership: Crisis Management for Engineers, for graduate students at Columbia University’s Fu Foundation School of Engineering and Applied Sciences, also known as Columbia Engineering.

Garcia has been an adjunct associate professor at Columbia Engineering since the summer of 2017, where he has taught Introduction to Ethics to all 1,400 incoming 2017 graduate students. The pilot for the elective in advanced leadership and crisis management was conducted on November 10, 2017.  More than 140 students, or about ten percent of the student body, enrolled in the course.

The course focuses on the drivers of trust and how engineers can make smart decisions in a crisis by achieving mental readiness: a combination of emotional discipline, deep knowledge, and intellectual rigor. It builds on material that students learned in Garcia’s Introduction to Ethics course.

 

Case Studies

The Advanced Leadership: Crisis Management for Engineers course features three case studies of crises involving engineering and engineers.

The first, the 2010 BP Deepwater Horizon explosion.  BP’s mishandling of what became the nation’s largest environmental disaster cost CEO Tony Hayward his job.

The company suffered significant consequences:

  • BP pleaded guilty to 11 counts of manslaughter and one count of lying to Congress.
  • BP paid $62 billion in fines, penalties, and settlements.
  • BP stock lost $105 billion in value in the months following the explosion, and remains depressed even seven years after the explosion.

The second case study was on General Motors’ handling of problems with the ignition switch in Cobalt and similar model cars that had been implicated in fatal accidents. The problem was discovered in 2001, but, according to an independent investigation in 2014, because engineers failed to fully understand the way the car was designed, GM labeled the issue a “customer inconvenience” rather than a safety defect, and therefore took very little action to resolve it for more than a decade. By 2014, 124 people had been killed, 17 people had suffered catastrophic injury such as multiple amputations or pervasive burns, and 250 others had been hospitalized with major injuries.

The consequences to General Motors were also significant:

  • GM paid $600 million to families of those killed or injured.
  • The company entered into a deferred prosecution agreement with the U.S. Department of Justice.
  • As part of the deferred prosecution agreement, GM forfeited $900 million.

The third case study focused on Apple’s dispute with the FBI following the terrorist shooting in San Bernardino, California. In early 2016 the FBI obtained a court order compelling Apple to design software to allow investigators to unlock a suspect’s iPhone and to overcome the encryption of any data that might be on the phone. Apple refused, saying that such software would make it possible to unlock every iPhone, creating significant safety and security risks for millions of Apple customers around the world. Two days later, Apple CEO Tim Cook received a standing ovation at the company’s annual shareholder meeting.

. . . . . . . . .

Logos analyst Holly Helstrom helped Garcia design the course and the case studies, as well as his Introduction to Ethics course and an advanced ethics elective that will launch in December, 2017,

The Crisis Management for Engineers course is offered through Columbia Engineering’s Professional Development and Leadership program, which is intended to help engineering graduate students develop skills that will help them navigate the world of commerce, government, and academia following their course of formal study.

Garcia teaches similar courses in New York University’s Stern School of Business Executive MBA program and in NYU’s MS in Public Relations and Corporate Communication program,  He also teaches similar content as a contract lecturer at Wharton/Penn, both traditional and executive MBA, Philadelphia and San Francisco.  He also teaches as a contract lecturer in several of the professional schools of the U.S. military, including the U.S. Defense Information School, the U.S. Air Force Air War College, and various Professional Military Education programs of the U.S, Marine Corps.

 

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New Book: The Agony of Decision by Helio Fred Garcia

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Logos Institute is very pleased to announce the publication of a new book by Helio Fred Garcia,The Agony of Decision: Mental Readiness and Leadership in a Crisis, volume 1 of Logos Institute Best Practice Series. The book is also the first volume in our publishing imprint, Logos Institute for Crisis Management and Executive Leadership Press.

The book is now available for purchase here for individual or bulk orders. For a 15 percent discount, use the discount code QW9CFYKM. A Kindle edition is also available here on Amazon.

This book is about how leaders and the organizations they lead can maintain reputation, trust, confidence, financial and operational strength, and competitive advantage in a crisis.

Through Fred’s 30-plus years of professional involvement in thousands of crises affecting companies, governments, NGOs, and other organizations, he has discovered that the real value in resolving crises is not in excellent internal and external communication, nor in highest-quality tactical execution, however important they may be – and they are mighty important.

Rather, real value came from helping clients figure out and answer the bigger questions and then make the tough choices in a timely way. The execution would follow. So would the communication.

But people often misunderstand. That’s why Fred felt the necessity of writing this book — to help leaders think clearly, plan carefully, and execute effectively when facing high-stakes decisions. A wise man once said, the only meaningful way to escape the agony of decision is by thinking.

This book is for leaders of organizations who need to be good stewards of reputation, trust, and competitive advantage; and for those who advise those leaders, whether in public relations, law, or other business disciplines. We hope you find it helpful.

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Holly Helstrom Guest Lectures at NYU

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Logos Institute for Crisis Management and Executive Leadership research fellow Holly Helstrom presented a case study on mental readiness and navigating business challenges to students in New York University’s MS in Public Relations and Corporate Communication program. Ms. Helstrom spoke on April 29, 2017 in an advanced elective on crisis communication taught by Logos Institute executive director Helio Fred Garcia.

This seven-Saturday elective course focuses in part on the predictable patterns of poor decision-making business leaders often follow during crises, and how this is commonly the result of leaders’ critical loss of perspective.

Holly Helstrom guest lecturing at NyU

Holly Helstrom guest lecturing at NYU

Ms. Helstrom demonstrated to the students that when leaders and their organizations regularly practice mental readiness — the persistent ability to remain calm, think clearly, and maintain situational awareness — it allows them to avoid or manage through crises successfully, and achieve enduring success.

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The focus of Ms. Helstrom’s case study was Pixar Animation Studios, one of the most successful film studios in the industry’s history. She provided an in-depth look at how Pixar’s leaders’ commitment to including the disciplines of mental readiness into everyday business operations has allowed the studio to routinely produce number one films and navigate business challenges successfully.

Ms. Helstrom highlighted some of Pixar’s processes that integrate the disciplines of mental readiness, then illustrated how these processes helped the studio in overcoming one of the most complex and challenging crises a business can face: a corporate merger with Disney.

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Ms. Helstrom joined the Logos Institute for Crisis Management and Executive Leadership as a research fellow in 2016. She is lead curator for the institute’s intellectual capital materials, researching and preparing in-depth case studies that bring to life the principles and best practices that comprise Logos Institute’s curriculum.

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Prior to working at Logos, Ms. Helstrom worked in the Metropolitan Museum of Art’s public relations department. In 2015 she graduated from New York University with a B.A. in art history. Her senior research paper focused on the strategic use of art exhibits in post-war Germany as part of the country’s broader public relations campaign to refurbish its reputation on the international platform, and reunite the war-torn German population.

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Does Brand Loyalty Always Help in a Crisis?: Guest Blog by Nicky Honghao Ruan

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by Helio Fred Garcia

This is my sixth in a series of guest blogs featuring my recently-graduated capstone (thesis) advisees in New York University’s Master’s in Public Relations and Corporate Communication.

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See my earlier posts:

In this blog, Nicky Honghao Ruan looks at the issue of brand loyalty, and makes a counter-intuitive discovery:  Sometimes, very strong brand loyalty can make companies’ crises worse than if they don’t have brand-loyal customers.

Nicky explores a range of crises affecting different kinds of organizations, and identifies the criteria of the organization, of the customers, and of the crisis that predict whether brand loyalty will help or hurt an organization in crisis.

Better yet, she provides a template that can help leaders and their advisors anticipate what will work and what will hurt, and to adapt accordingly.  Worth reading.

You can download the entire capstone here.

 

Brand Loyalty in Crisis:

How does strong brand loyalty affect a company during crisis under different circumstances?

by Nicky Honghao Ruan

Nicky Honghao Ruan

Nicky Honghao Ruan

Consumers are familiar with programs like “My Coke Rewards,” “Marriott Rewards” or “AAdvantage,” that help to contribute to a core marketing concept — brand loyalty.

Brand loyalty has long been endorsed by marketing experts as an intangible asset for a company or organization. Conventional wisdom suggests that strong brand loyalty can empower a company to overcome crises, but practitioners often overlook the potential risk of strong loyalty when the nature of the crisis changes. In some cases, strong brand loyalty does not shield a company from crisis, but can instead become a liability because the high expectations of loyal customers were not met.

Through case studies, in-depth interviews with crisis management experts, and public surveys, my capstone examines the interplay between crisis conditions and the role of strong brand loyalty, and identifies various causes for both helpful and harmful outcomes.

As a result, I developed a model for crisis management professionals to quickly evaluate whether to incorporate a brand’s loyalists as defense strategy, or instead to plan for ways to prevent the extra harm that could instead be created by loyalists.

Mapping the Template

Chart 1Brand loyalty is more likely to help a brand under conditions in the left column (green), and more likely to harm one under conditions in the right column (red).

At the same time, those criteria in the top row (darker color) would have stronger impact than those in the bottom row (lighter color).

The one that falls in the middle column is especially situational and could go either way.

When a crisis happens, a company would be involved with more than one of these conditions. Depending on the situation at the time, crisis management professionals would take the template and check what criteria the brand fulfills and which side it tends to lean on more.

Examples

When Strong Brand Loyalty Helps:   

Blue Bell’s Listeria Crisis

BlueBell Logo

In early 2015, U.S. ice cream maker Blue Bell announced several rounds of complicated recalls of its ice cream after listeria in its products infected five consumers and led to three deaths.

Although its crisis response was strongly criticized, Blue Bell’s strong loyalists remained highly tied with the brand.  The beloved Southern ice cream maker made it through the summer without having any product on shelves. During the time, fans continued to engage with the company on social media.

In fact, Blue Bell’s fiercely loyal consumers were waiting in long lines outside stores when the company finally came back to the market.

Chart 2

 Apple  iPhone 4’s “AntennaGate”

Apple Logo

Very soon after Apple released iPhone 4 on June 24, 2010, complaints about signal attenuation began to flood the web.

When faced with growing negative reviews, widespread criticism and potential lawsuits, Apple’s initial solution was to tell users to not hold their phones in certain way.

Critics argued that Apple’s crisis response broke all the rules: the company didn’t apologize immediately or take full responsibility. Despite all the negative publicity and critics, demand for iPhone 4 continued to exceed supply.

Chart 3

In the case of Blue Bell and iPhone 4, the brand was in the green more than in the red. Therefore, their strong brand loyalty helped the companies overcome the crisis.

 

When Strong Brand Loyalty Hurts:

The “New Coke” Launch

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Thirty years ago, Coca-Cola made its worst mistake when, without warning, it abandoned its original formula and replaced it with “New Coke.”

Long-standing customers felt betrayed.

Some deserted the brand for its biggest competitor Pepsi.

Ultimately, Coke’s strong brand loyalty led to one of the company’s largest PR crises, driven by a fierce reaction from fans who believed Coke was neglecting them.

After three months of justifying the unilateral withdrawal of its beloved Coke, and insisting that customers would prefer the new Coke, Coca-Cola brought the original back as Coke Classic.

Chart 4

Susan G. Komen and Planned Parenthood

SGK LogoOn January 31, 2012,  the Susan G Komen Foundation announced its decision to stop funding  Planned Parenthood.

The halt would affect breast cancer screening and treatment services — mostly provided to poor or uninsured women — at 19 of Planned Parenthood’s affiliates.

Within hours after the news broke, Komen was flooded by public outcry. During the next three days, the foundation saw significant lost in donation and the negative response it received was overwhelming.

After 72 hours of the initial decision, Komen Foundation announced that it would reverse the funding decision.  But the reversal didn’t stop the damage.

Long-standing Komen supporters who felt hurt and betrayed refuse to forgive the organization. Both event participation and revenue of the nation’s best known cancer foundation continued to drop.

Chart 5

Volkswagen’s Emissions Scandal

Volkswagen Logo

In  2015, the U.S. Environmental Protection Agency (EPA) found that German automaker Volkswagen Group (Volkswagen) had installed software in a number of cars sold in the U.S. that would provide artificially positive results  during emission tests.

Volkswagen later admitted that it had intentionally equipped its vehicles to cheat on emissions tests. For the first time in 13 years, Volkswagen’s sales in the U.S. declined 15% in November 2015.

Marketing and communication experts think that Volkswagen would be hard to forgive, especially by many of its loyal consumers.

The fact that the company voluntarily cheated on the public was worse than negligence or mistakes in testing procedure, which set itself apart from other auto recalls in the industry though some of them even linked to deaths.

Chart 6

Conclusion

The New Coke, Komen and Volkswagen crises saw far fewer conditions in the green compared to those in the red. Therefore strong brand loyalty in these cases created a backlash.

This model creates a shortcut for communication professionals to quickly evaluate their brand loyalty’s position and the likelihood that loyalty will help or hurt the organization navigate a crisis.

When a brand falls more into the green cells, instead of immediately pulling out everything, e.g. halting production or crafting the perfect apology, time and money could be better spent on gathering information and resources to fix the problem.

When a brand falls more into the red cells, the essence of response strategy should include gaining forgiveness from loyalists.

Perhaps more significant, the model can stimulate companies to take brand loyalty into serious consideration before making business decisions.

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