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

An argument is no match for an aura.

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

Politics and Framing

Read more

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

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

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

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

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

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

YIKES!!!! and DOUBLE YIKES!!!

Read more

socgen.gifOne of the recurring themes of crisis management is that most harm in a crisis is self-inflicted, either in the first instance or because of a late or weak response, or both.

A second theme is that an effective response is often delayed by predictable mis-steps. Logos Institute has catalogued ten missteps that seem to be the common denominators of mis-handled crises. These ten missteps constitute predictable patterns that can be identified early and overcome, if only you know what to look for. One of these missteps is to ignore a problem that is otherwise evident.

A third theme is that these missteps are often caused or intensified by lack of humility among decision-makers.

These three themes were brought into sharp focus in today’s (Feb. 5, 2008) New York Times, whose business section has a detailed account of the missed warning signs at Société Générale, the French bank where a rogue trader cost the bank more than $7 billion.

Read more

Target ad Target Corp. recently got into hot water over their response to a blogger, and the response at the center of the conversation/controversy is instructive in what companies should not do when responding to the blogosphere. The story is also a recent example (among many) of how mainstream media and social media have converged. The story started on the Shaping Youth blog, whose writer wrote to the company about concerns over this Target ad. The blogger contacted Target, and got this response:

“Thank you for contacting Target; unfortunately we are unable to respond to your inquiry because Target does not participate with non-traditional media outlets. This practice is in place to allow us to focus on publications that reach our core guest.

Once again thank you for your interest, and have a nice day.”

It’s no surprise that the company’s response – and the story – gained legs and started making its way around the blogosphere, and finally made the leap to mainstream media yesterday on the New York Times.

Side note: I’ve found it interesting that when I’ve talked about this story with different people, most poeple’s reaction is surprise – because it feels so uncharacteristic and out of brand character to them.

Howard Schultz, Source: AP

“Crisis management is the new black!” A good friend recently shared that revelation with me via email. I had to laugh, not only because I enjoy a witty fashion metaphor, but because I’ve also enjoyed watching crisis management come of age in the public consciousness. Even in this era of distrust and information saturation, people are warming up to the power of the sincere apology – a step toward redemption requiring that dollop of humility my partner Fred Garcia writes about. More and more, people are welcoming the forward arc of emotionally-intelligent, collaborative leadership on a global scale. Absolutely fabulous, I say!

Read more

What are the leadership attributes that contribute to long-term success? That help get through adversity?

I was reflecting on these questions as I put together our year-end review of crises, The Year of Living Self-Destructively. The defining crises of 2007 were all self-inflicted; even where the triggering event was external, the leader’s handling of the crisis only made things worse.

What these crises had in common was this: the leaders who caused the self-inflicted harm exhibited little, if any, humility. Read more