Obama 2009 Performance Review: Stuck in the Muck

If we examine President Obama’s performance in terms of the five most common reasons why CEOs get fired, the analysis is quite revealing.

Reason #1: Failure to deliver what was promised upon hiring

Where do we begin? The economy remains a mess. Unemployment keeps increasing. There is mistake after mistake, with no real sense of urgency about solving any particular problem. All Obama does is tell us how tough it is and how much we will have to suffer. Bad ideas continue, like closing Guantanamo, and trying terrorists in the U.S. court system. For killing thousands of Americans, terrorists get American citizenship.

Reason #2: Over optimism

Homeland Security’s Chief Officer, Napolitano, said it best. After a terrorist successfully defeated security measures, boarded a U.S. aircraft in Amsterdam, but (through his own stupidity) failed to detonate the bomb strapped to his body and was apprehended by a passenger, Napolitano’s comment was, “The system worked!” And, within hours, Americans get subjected to further humiliation at airports.

Meanwhile, during the most extraordinary security lapse since 9/11/2001, the President remains on vacation while the news media drives the country into turmoil. Any governor or mayor knows that if these serious events happen (on Christmas Day no less), they better get back to their desks and lead the investigations.

Obama hardly ever uses the word “terrorist” in his speeches. Is he afraid?

Misfiring, lost opportunity, and premature ejaculation are the strategies of this administration.

Reason #3: People problems

The second responsibility of any chief executive is to put in place the people who can make the leader’s vision happen. There is, apparently, only one visionary in this administration, Hillary Clinton. Everyone else seems to be a problem, whether it's his spokespeople, his chief advisers (a bunch of Chicago politicians), or his own unenthusiastic, visionless style. We have no national team with national experience. We have enormous inexperience and a couple rogues, like the U.S. Attorney General whose decision to do terrorist show trials near Ground Zero will only accelerate terrorist attack attempts. These trials should be done in The Hague or some remote village in Siberia.

Reason #4: AWOL

This president has visited more countries than any first-year president ever has. Why? He has spent most of this time sucking up to foreigners instead of stating carefully fashioned, clearly understandable United States policy. Then, he accepted the Nobel Peace Prize, an award he should have refused as being unqualified. In pursuit of mindless visibility, the Nobel committee made the award and, in the process, diminished its importance. Mr. Obama’s acceptance speech required that he admit to the world that he had no real accomplishments or credentials to justify the award, except that it's really tough running two wars at the same time.

This kind of travel and vacuous activity is usually reserved for the second term when a president has very little to do and is out of ideas. Obama has started early on his second term.

Reason #5: Stuck in the muck

What has been accomplished for the average American this year? Banks, insurance companies, Wall Street, the credit card industry, and real estate all have been bailed out or protected by the American taxpayer. Banks, while refusing to loan money to help restart the economy, hoarded plenty of cash to pay enormous bonuses to the very perpetrators who have destroyed the lives of millions of Americans. The insurance industry, led by AIG, will pay the largest bonuses in history after perpetrating unspeakable damage on America’s economy for which we have given them hundreds of billions. The credit card industry, completely unbridled and arrogant, continues to gouge Americans without punishment, without regulation, and without shame (thanks, of course, mostly to U.S. Senator Christopher Dodd D-CT). The real estate industry, led by the same perpetrators of the last collapse, have found new ways to package mortgages, perpetuate credit default swaps, and other predatory financial practices. And then there is Wall Street, the theme park of American greed. They never stop, they always take, and they always get away with it. America is the laughing stock of Wall Street. (This, of course, mostly engineered by America’s business schools who look down on the American working person and only look up to the person who makes the most money and acts like the biggest bully.)

This president has done nothing to reassure the American public that something has been done or will be done to get this quintumverate of economic disaster and greed under control.

Even healthcare reform will turn out to be a financial bonanza for every key economic player, especially the insurance industry, courtesy of U.S. Senator “Goofy” Lieberman, except, of course, American taxpayers and American patients. The quintumverate wins again.

Summary Assessment

Presidents get about 210 days to get their vision launched, their dreams in wide circulation, and to marshal their forces to achieve what they set out to accomplish. Then the postmortems begin, coupled with midterm elections. Following the midterms, comes to 24-month effort at reelection. This president has effectively missed three crucial milestones to his future success: the failure to state a vision this country could strive for (“change” is a jingle, not a vision); failure to assemble a credible, powerful, highly accomplished national team; and failure to execute a credible, productive sense of urgency or crisis management so necessary to mobilize public attitudes and public support. No American president in history, with the possible exception of Abraham Lincoln, has been presented with such a monumental series of opportunities for great, even immortal leadership.

His legacy, thus far, has been to resuscitate a moribund Republican Party, help us all forget just how bad a president George W. Bush was, and to wonder if anyone actually knows or understands the state of our Union.

Washington D.C., to quote futurist John Naisbitt, “is the theme park of American democracy.” But, as it stands at the end of 2009, most of the rides are broken or in very bad repair, and the guy we hired to fix them (who promised change) has yet to show up for work. He’s out there stuck in the muck.

Any other CEO with this track record would be looking for work, after having received a tremendous severance package.

Maybe it’s not too early to ask . . . “What would Hillary, or Sarah, or somebody else do?”

Where’s the Dream?

Our nation needs a dream. Whatever your political persuasion or philosophical bent, most of us across all strata of society get energized by the dreams of those who lead us. Right now there is a sensational vacuum.

One of the reasons we may be stumbling, fumbling, mumbling, and bumbling as we enter 2010 is that “Change” is not a dream, and deflecting major decision making to outside groups — the UN or Congress — is definitely not a dream.

What is our next destination as a nation? Kennedy used space; Johnson had the Great Society; Clinton had the end of big government as we knew it; Reagan had the end of the Soviet Union.

America is truly the place on the planet where personal dreams can come true, but we need more and bigger goals or aspirations to strive for and take pride in . . . or to hate and target. Dreams show us the way. Dreams help us all set timelines, deadlines, and expectations.

Big dreams help define the next phase of our destiny. The bigger the dream, the greater the impact.

We are waiting.

Have great holidays and keep asking, “Where’s the dream?”

What’s Next for Tiger Woods

I know you’re tired of hearing this stuff, but I couldn’t resist. Tiger and his troubles fit an unmistakable pattern.

His life will increasing resemble being at war—long periods of boring quiet and inattention punctuated by explosive, disclosive, sometimes disturbing events. What do we know for sure?

1. He'll be back bigger than ever, if he plays the way he has. We love to celebrify criminals and fallen celebrities who strive to rehabilitate and return. (Watergate criminal G. Gordon Liddy is advertising Gold on national television.)
2. A whole new Tiger’s Failures industry has been born, “What did Tiger really do?” “What did Elin use the golf club for?” “Tiger’s girls” “Who’s Tiger putting now?” This will “dog” him for the rest of his professional life. He won’t make a dime from it. Many, many show business, sports, political, and business leaders (especially those who have failed gigantically or miserably) become highly visible and famous due to the magnitude of their mistakes or misfortunes. We love the recovering. They don’t even have to be repentant.
3. The worst has yet to be disclosed.

What Would Tiger’s Dad Have Done?

Perhaps the way to approach the state of Tiger Wood’s affairs is to ask the question, “What would his dad, the architect of his life, do?” How would Tiger’s father analyze what Tiger has done thus far? Using Tiger Woods’ December 2, 2009 statement (on http://www.tigerwoods.com/), let’s walk through his “comments on current events” through the eyes of someone who really cared about him.

1. “I have let my family down and I regret those transgressions with all of my heart.”

Comment: What are the transgressions? The first rule of apology is that the admission must contain meaningful specificity.

2. “I have not been true to my values and the behavior my family deserves.”

Comment: What are those values, Tiger? Benjamin Franklin had 13 values, ranging from frugality to humility. How do we know what your values really are without specifying which ones you transgressed?

3. “I am not without faults and I am far short of perfect.”

Comment: What are those faults, Tiger? What are the imperfections to which you refer?

Note: We’re only three sentences into Mr. Woods’ comments and already there are a dozen questions.

4. “I am dealing with my behavior and personal failings behind closed doors with my family.”

Comment: The problem is that you’ve opened the doors by talking about these things. If you really wanted to be helpful, you would outline what one or two of those personal failings happen to be.

5. “Those feelings should be shared by us alone.”

Comment: Why? You’re a brand. Brands are owned by those who trust, use, and benefit from them. It is the brand owners who determine what is private and what isn’t.

6. “Although I am a well-known person and have made my career as a professional athlete, I have been dismayed to realize the full extent of what tabloid scrutiny really means.”

Comment: You’ve lived in a highly positive cocoon for much of your life. This tends to make you a virgin when it comes to operating in a real world situation. There is nothing more fascinating to the news media than deflowering someone who lives by the media, but who feels they shouldn’t have to die by similar fashion. Welcome to the real world.

7. “For the last week, my family and I have been hounded to expose intimate details of our personal lives.”

Comment: From the perspective of most of us, you live in the protective environment of what appears to be a wonderful home, a gated community and private property, where you’re pretty insulated from “hounding” by anyone. This is classic arrogant, frat boy whining.

8. “The stories in particular that physical violence played any role in the car accident were utterly false and malicious.”

Comment: Now you tell us. How do we know? We need more information, because of how much you’ve already not told us.

9. “Elin has always done more to support our family and shown more grace than anyone could possibly expect.”

Comment: Yes, Tiger, it’s only her forgiveness that matters. And it sounds as though you’ve got a ways to go to achieve that.

10. “But no matter how intense curiosity about public figures can be, there is an important and deep principle at stake which is the right to some simple, human measure of privacy.”

Comment: There is no saint like a reformed sinner. Mr. Woods has, apparently, sinned mightily and now asks that it remain covered up until he can somehow manage its affects.

11. “I realize there are some who don't share my view on that.”

Comment: Like most of us, Tiger, when you do stupid things you get dumb visibility.

12. “But for me, the virtue of privacy is one that must be protected in matters that are intimate and within one's own family.”

Comment: There’s that comment about virtue again. What are the virtues we’re talking about? The virtue must mean, “Leave me alone when I want to be left alone.”

13. “Personal sins should not require press releases and problems within a family shouldn't have to mean public confessions.”

Comment: When you’re a public person and, more importantly, a brand, every aspect of your existence is open to explanation, debate, and questioning.

14. “Whatever regrets I have about letting my family down have been shared with and felt by us alone.”

Comment: There’s a book in there somewhere, by someone.

15. “I have given this a lot of reflection and thought and I believe that there is a point at which I must stick to that principle even though it's difficult.”

Comment: What is that principle? How has sticking to that principle helped you so far?

16. “I will strive to be a better person and the husband and father that my family deserves.”

Comment: Again, Tiger, what does this mean, specifically? What behaviors will you change? What about your virtues and values needs to be repaired? What are the lessons you’ve learned that you will apply in this circumstance? In the forgiveness game, you need to acknowledge, specifically, what the faults and errors were.

17. “For all of those who have supported me over the years, I offer my profound apology.”

Comment: What about the rest of us? Those of us who didn’t get to come to the cocktail parties or couldn’t afford to be in the galleries when you were playing, but who admire you just as much? What’s the purpose of limiting your apology to those who know you? When you’re a brand, you need to apologize to the entire universe that your brand affects.

The formula for Tiger Woods, which will still work, is a profound, humble, positive, open, sincere, and conditionless public apology by him, in person, along with an explanation for the questions he’s already raised.

Most public sinners wind up on 60 Minutes talking to Mr. Kroft, the show’s angel of righteousness (prophylactic humiliation).

Maybe this time, instead of the usual cast of 60 Minutes, they should get Frank Deford, who actually knows something about sports and celebrities to conduct the interview. We all look forward to it and to the end of Tiger’s troubles.

Tiger’s Troubles

He Can Putt 50 Yards But Stumbles, Fumbles, Mumbles, and Bumbles a Simple Direct Apology

What should Tiger Woods really have done?

Within the first 30 to 45 minutes of the incident occurring, he should have given the police a statement and had the police give it out to the public:

"About an hour ago, following an intense argument about a family matter, and upset, I angrily drove my SUV out of my driveway, lost control of the vehicle—apparently hitting a fire hydrant, perhaps a couple of parked cars, and ultimately a tree across the street from my driveway. The incident happened pretty fast, and I got a little banged up. Within seconds of the crash, my wife, Elin, was outside of my SUV breaking a window to help get me out of the vehicle.

This is a silly, needless, three-minute incident, all my fault, which will cause my family and those who know me some brief anguish and public exposure. For that I am profoundly sorry.

I will do whatever the police instruct and humbly ask the forgiveness of my family and neighbors for the disruption I’ve caused in their lives this evening."

Such an initial statement would create four things that, in hindsight, Mr. Woods seems to think he is owed:

1. Some semblance of privacy
2. Being able to avoid the embarrassing speculation of others and moderate media frenzy that occurred
3. The ability to control his personal circumstances
4. His integrity and brand value largely intact

There has yet to be a true apology from Mr. Woods and, indeed, there may never be one revealed publicly.

The most constructive structure for apology I’ve seen is in The Five Languages of Apology: How to Experience Healing in All Your Relationships, a book by Gary Chapman and Jennifer Thomas. Here, with some paraphrasing and modification based on my experiences, are the ingredients of the perfect apology:

1. Regret (acknowledgment): A verbal acknowledgement by the perpetrator that their wrongful behavior caused unnecessary pain, suffering, and hurt that identifies, specifically, what action or behavior is responsible for the pain.
2. Accepting Responsibility (declaration): An unconditional declarative statement by the perpetrator recognizing their wrongful behavior and acknowledging that there is no excuse for the behavior.
3. Restitution (penance): An offer of help or assistance to victims, by the perpetrator; action beyond the words “I’m sorry”; and conduct that assumes the responsibility to make the situation right.
4. Repentance (humility): Language by the perpetrator acknowledging that this behavior caused pain and suffering for which he/she is genuinely sorry; language by the perpetrator recognizing that serious, unnecessary harm and emotional damage was caused.
5. Direct Forgiveness Request: “I was wrong, I hurt you, and I ask you to forgive me.”

Do apologies matter? Twenty-nine states seem to think so. These states have enacted legislation exempting voluntary expressions of regret and apology at traffic accidents from being considered by juries when setting auto liability damages. Legislation is pending in Congress to mitigate the impact of liability on malpractice insurance claims against doctors and medical personnel who apologize immediately, or very quickly, and sincerely.

The hard part of apologizing is the admission of having done something hurtful, damaging, or wrong and requesting forgiveness. In practice, skip even one step and you fail to convince anyone of your sincerity or integrity.

My immediate advice to Mr. Woods:

1. Get better legal counsel; get better communications counsel (they are very different disciplines); then listen up.
2. Brands (which is what you have intended to be) have no rights to privacy. There are owned by the publics who purchase and trust them.
3. Abject, humble, meaningful, and sincere words of apology—personally delivered—generate enormous public sympathy. The single most powerful benefit of this behavior is that the media hate it and generally won’t cover it, for long.

Remember the rules for forgiveness:

1. Silence is toxic.
2. Candor builds trust.
3. Openness calms the masses.
4. Apology is the atomic energy of empathy for your believers, followers, and wannabes; disables the media; and disempowers attorneys.
5. Public repentance is required. Some extraordinary act of generosity affecting a wide variety of people and places is called for, something that preferably really hurts.

In my next blog post, I’ll take Mr. Wood’s most recent statement and specifically, sentence by sentence, describe what he should have done.

If you’re interested in reading more about apology, visit Who's Sorry Now: The Growing Art of the Apology.

Terrorist Trials in New York, a Tragic Decision

The decision by US Atty. Gen. Eric Holder, cheered on by New York Mayor Mike Bloomberg and members of the media to stage terrorist trials in New York City reflects the present culture of leadership training our society fosters in its government leaders, business leaders, even legal and religious leadership. They are taught to overwhelm, defeat, and vanquish. Winning is never enough. True leaders have to hold the defeated up for public ridicule, prophylactic humiliation, then strut their heads around on a stick. How can this be seen as any kind of propaganda victory for America?

In the process, while a few public officials, aggressive prosecutors, plaintiff attorneys and a 24/7 bloviator-driven media that, with unfairness and imbalance, plus the all bull, all bias boys and girls, enjoy focusing on all the negativity about America the spectacle will generate . . . the rest of us will be held hostage to the needless circus while the terrorists as civilian criminals have a global platform to hate us and spit on us for months, maybe years.

We have very effective military tribunals to try war criminals. These tribunals take place in less significant locations under circumstances that befit the crimes. Who is clamoring for show trials and, in the process, baiting and needlessly focusing the destructive energies of thousands, perhaps millions of militant America haters? These trials will be seen for what they are, a victory of testosterosis over justice.

For Crying Out Loud

When it comes to errors, goofiness, and the insensitivity of top managers, there must be a part of the business school campus that is intentionally avoided—the school of sensible answers and actions.

Case and point: A health care client recently discovered the presence of a mold in one of its buildings, a species that commonly occurs during construction. In another part of the same building, there have been suspicious deaths, although all of the patients involved were already extremely ill. The patients that expired were cared for by two different physicians, both of whom have indicated that the mold may be to blame.

The crucial issue for management seemed to be, rather than dealing with the mold issue directly, was to spend some time (several hours) discussing and debating what their disclosure obligations were. Here are the questions under discussion:

1. How much of this do we have to disclose and to whom?
2. When do we have to disclose it?
3. What should be disclosed first and what can wait?
4. If new facts arise, when do we disclose this newly found information?
5. Are we responsible for balanced disclosure?
6. What are the limits of disclosure we will tolerate before we close this door?
7. Once we start this process, how long do we have to talk about it and keep providing additional information?
8. Won’t too much disclosure discourage and frighten patients and their relatives unnecessarily?
9. Who should make the disclosures? Should this individual be an attorney?
10. What do we not have to tell anyone?
11. Is it possible that some of the information comes under HIPAA regulations and therefore must be kept confidential?
12. How much of this disclosure is a business decision and how much is a moral decision?
13. Should businesses, even health care organizations, be making moral decisions?

The disclosure dilemma occurs frequently in business life. And the habit of over analyzing seemingly simple situations by management is also too common.

What’s your opinion? What should the rules of disclosure be and under what circumstances?

CEO Sissy Factor

The Trouble Your Business School Buddies and Networks Can Get You Into

Recently, I was having dinner with the leadership of a large industrial company and the dinner table discussion turned to crises, reputation, and other kinds of problems I come across in my work. The CEO, someone I just met, asked a really interesting question. “What common leadership factors or threads do you find that might cause the crises management failures you wind up handling?”

While all crises have unique patterns, this is a Chief Executive Officer asking, and his question is really about people like himself. Here’s what I told him and his assembled managers:

There are three common behaviors among top leaders, it seems to me, that either cause, complicate, or contribute to management failures and make problems or crises worse.

1. Predecessor Paralysis

The CEO defers taking action, primarily because it will unduly embarrass or otherwise reverse or repudiate something a key predecessor has accomplished or put in motion. The thinking is, apparently, that the CEO “wouldn’t want to make their predecessors look silly.”

2. The Staff Straightjacket

The senior staff can’t agree on what an appropriate plan of action might be. They seem torn between neither wanting to offend key players or key peers, nor wanting to put themselves in any particular danger. You’ll hear the refrain, “You’ll make us all look bad, probably for no reason.”

3. The Peer or Pal Sissy Factor

This is when a buddy, peer, or pal calls and says, “Don’t give in to those buggers, you’ll look silly and foolish, and you’ll make it much, much harder for the rest of us. Besides, if you’re wrong about this, you’ll make us all look bad and set a precedent we’ll all have to live up to or live down.”

Bonus: The Jerk Factor

Some years ago, I had a client who pled guilty to hundreds of felonies. I worked very closely with the lawyers and corporate monitors to help this company resolve its issues, and to prepare for their new life and the impact of the guilty plea. We briefed managers on the company’s guilty plea the previous afternoon in Boston, by reading and then explaining the plea agreement.

Even after reading and hearing the plea agreement read out loud, the first question from the audience was for “the real story of what happened.” So I spent a little bit of time talking about the importance of understanding that the plea agreement is the story and the new tough rules, regulations, and sanctions under which the company would be operating for a while. At which point, the new president of the company (who really didn’t like me anyway) stood up and remarked, for all to hear, “Jim, when you are talking, it seems a bit like Sunday school around here.”

I responded by saying, “Bill, if my company just pled guilty to nearly three hundred felonies, I would think a little Sunday school is in order.” He didn’t laugh, although almost everyone else did. He was gone in four months, and I still occasionally consultant with the company after all of these many years.

Radical But Necessary: A New Way Forward

The 13 Commandments of Economic Change in America

Ever notice the formula for moving ahead in America? Catastrophe + democracy = progress.

It takes catastrophe to force democracy forward: Black Friday; Pearl Harbor; 9/11; Hurricane Katrina; and the market crash of October 15, 2008, so many were and remain hurt so desperately by so few.

It’s far more than a crisis management or crisis communication problem. The incompetence, ignorance, and political paralysis of government, combined with the implacable gall of America’s Greed Team—real estate, banking, Wall Street, insurance, and the commercial credit industry—has created a fragile but powerful epiphanal moment when real change in America’s economic structure and destiny is possible.

We have a brief chance to recalibrate and reset crucial economic processes that will help us deter, detect, and prevent similar situations from occurring in the future. How will we capture this moment? I believe that what will catalyze the opportunity for change is America’s growing revulsion toward Wall Street and the major economic and financial engines upon which we have relied for the last couple hundred years, and who financially robbed, raped, kicked, and stabbed so many, so easily, for so long.

Since an outbreak of business and leadership integrity is highly unlikely, and President Obama’s amorphous and nebulous quest for “change we can believe in” notwithstanding, Americans now realize that those in charge of our economic institutions (even the “new” people) are the same folks who brought us this catastrophic mess in the first place, and they are simply incapable of getting us out. We need a new strategy, a new roadmap. In the coming days, I’ll be making 13 demands for change that radically depart from the failed old formulas and arrogant greed perpetrators of yesterday and today. Here’s a sample:

1. Tie all investment transactions, of every kind, to real dollars (or currencies) and common sense.
2. Prohibit and eradicate all transactions that fictionally expand (leverage) the value of any underlying investment, including speculations, indexing, and derivatives.
3. Significantly escalate the regulations, oversight, controls, and restrictions on all transactions where any third party is investing, managing, hedging, or otherwise manipulating the financial resources of another party or parties.
4. Require extreme transparency for all transactions and related activities.
5. Completely revise how businesses are established and authorized in law to put greed second (or lower), and the community and protection of citizen wealth first.
6. Establish state-based offices to oversee and regulate Tax Subsidized Organizations (TSOs), currently known as Not-for Profits.
7. Prohibit transactions that bet on America’s failure or loss of value, including bankruptcies and short selling.

We need to break the cycle where one generation of perpetrators remains in place to teach and coach the next generation to conduct ever more sophisticated scams, deceptions, and frauds with greater frequency. This is truly a moment for innovative thinking and the breaking of old, corrupt models. Thus far, it appears very little change will occur. America’s Greed Team is already well on its way to recovery, at the expense of everyone else. All of which means that the next catastrophe will happen sooner rather than later.

I hope you’ll join the conversation and help make some demands or your own.

Boycotts . . . When Are They Real Crisis Management Threats?

Every week I review various boycott threat E-mails and comments, helping clients decide whether to take these issues seriously or not. Whenever a boycott is threatened, I always ask six diagnostic questions:

1. Are customers mentioning it as they come-in or cancel their orders, reservations, appointments, or activities?
2. Is this the subject of conversation among franchisees, related businesses, allies, partners, or employees and their families?
3. Is there chatter, at any level, about it on the Web, YouTube, Twitter, Facebook, or in chat rooms?
4. Have the bloviators, bellyachers, back bench complainers, or cable news fabricators been mentioning it more frequently?
5. Has there been an unexplained blip, positive or negative, in sales, reservations, orders, appointments, or collaboration requests?
6. Does it have or can it gain traction on college campuses? Is there some indication of independent sources of energy and focus, such as labor unions, religious organizations, or national activist organizations (e.g., ACORN and SAFE)?

If even one of these situations is happening, I would take the circumstance more seriously and begin to plan a response. Until one of these five questions gets a “yes,” the odds are that the boycott is just puff.

A little about boycotts:

• They rarely work unless the issue is so inflammatory or so obviously dangerous that a substantial number of people will alter their personal lives to participate.
• Very few people, anywhere in the world, get up in the morning and decide what they’re not going to do today.
• Truly successful boycotts are rare, but one current example is bottled water. Another less current example is activism against sweatshops and labor abuse. Among the current activist movements are several against major food producing companies, like McDonald's and Subway, on the issue of worker slavery, obscenely low wages, and abuse of farm workers.
• For boycotts to be successful, proponents need: (1) a substantive, overwhelmingly compelling issue; (2) a substantially sympathetic audience; (3) younger people or active constituencies for such causes as unions or religion, or some attraction on the college campus circuit; and most importantly, (4) there must be a target organization or industry that deserves to be singled out for punishment. People have to be angry, frightened, or vengeful.
• The most recent successful boycotts have been spontaneous and self-imposed, health focused, and usually against the foods we eat such as lettuce, spinach, tomatoes, peanut butter, asparagus, and ground beef - all due to fear of bacterial contamination.
• Most boycott attempts appear to be random political or highly emotional maneuvers, rarely well orchestrated, and therefore far less likely to succeed.

David Letterman's Crisis Management Failure

David Letterman, second-rate comedian, second-rate jokes, second-rate apologist, a man with an obvious integrity deficit.

Letterman’s silly, stupid, phony, non-apology for trashing the reputation of a 14-year-old girl is about what we would expect from this tired, old, non-talent. Except for the fact that he was sitting down, his four minutes of self-forgiving, excuse filled chitchat, followed by 30 seconds of his, less than serious, so-called apology, was really another old stand up routine, and the audience laughed and clapped. Some apology.

David, here is what an apology is:

The most constructive structure for apology I’ve seen is in The Five Languages of Apology, a book by Gary Chapman and Jennifer Thomas. Here, with some paraphrasing and modification based on my experiences, are the ingredients of the perfect apology.

1. Regret (acknowledgment) - A verbal acknowledgement by the perpetrator that their wrongful behavior caused unnecessary pain, suffering, and hurt that identifies, specifically, what action or behavior is responsible for the pain.
2. Accepting Responsibility (declaration) - An unconditional declarative statement of admission by the perpetrator recognizing their wrongful behavior and acknowledging that there is no excuse for the behavior.
3. Restitution (penance) - An offer of help or assistance to victims, by the perpetrator; action beyond the words “I’m sorry”; and conduct that truly assumes the responsibility to make the situation right.
4. Repentance (humility) - Language by the perpetrator acknowledging that this behavior needlessly caused pain and suffering for which he/she is genuinely sorry; language by the perpetrator recognizing that serious, unnecessary harm and emotional damage was caused.
5. Direct Forgiveness Request - “I was wrong, I hurt you, and I ask you to forgive me.”

The most difficult and challenging aspects of apologizing are the abject and humble admission of having done something hurtful, damaging, or wrong (which he admits he carefully planned) and to request forgiveness (which he carefully avoided). Skip even one step and you fail. Gloss over and trivialize any step and you reveal yourself for who you really are . . . someone unworthy of respect or attention.

Memo to CBS: Suspend him for a month, then probation for a year. If he does it again, kick his butt out the door and hire someone honorable, who is truly funny and the public can respect.

Crisis Management Questions: Working With Attorneys (Part 2)

Some things to think about:

1. Only one in every 100 cases (civil or criminal) ever gets to trial. That means the odds are very high that a case will be settled, arbitrated, or dropped. Failure to communicate until the attorneys discover that the case is not going to trial can cause serious customer, employee, victim, and senior management problems.
2. In the new world of the citizen journalist, which virtually nowadays includes employees, friends, and self-appointed bloviators and commentators of afflicted companies and organizations, someone is always willing to tell your story when you hesitate to tell it yourself.
3. Techniques such as crisis Web sites can be very effective in managing much of this extraneous information and activity, ultimately mitigating and often scripting outside chatter.
4. If there’s a question, take it to the boss. Lawyers are staff advisors just like communicators. The ultimate decision is made by the boss. If the boss allows the attorneys to turn you down, then move on to other serious issues. Make your case to the boss sensibly, based on what you know is going to happen and what you know needs to be done. Once the boss makes the decision, you need to move ahead on that decision until the next opportunity to challenge it or amend it arises. Avoid taking these decisions personally. Be professional.
5. A trend in legal practice, occurring for some time, involves the addition of lawyers who were formerly communicators to legal teams to preserve the privilege against the vulnerabilities communications can create for litigation. However, from what I’ve seen thus far, there are two problems. First, one is either a lawyer or a communicator. It’s impossible to be both at the same time. Second, I have yet to meet a lawyer-communicator who really worked for the client as much as they worked as a communicator seeking acceptance from fellow attorneys. The vast majority of communications work is not protectable anyway. Having a lawyer-communicator on the legal team involved in non-protectable activities, threatens the privilege for other legal matters, concepts, or ideas that could be protected. I think plaintiffs attorneys, and prosecutors, know this, too.
   
6. Lawyers need retraining in external communication skills because they learn a combative vocabulary and verbal style that flows through into all their communications. The real benefit of sensitive, compassionate, positive thinking communication inside and outside is often lost through imposing a “legalistic” style. Generally, a very different vocabulary and strategy is required for public communication. The aggressive, adversarial, negative approaches used in courtrooms create the exact opposite impressions in the Court of Public Opinion. Frankly, I don’t believe the combative and negative approaches work in the courtroom either, but that’s an argument for another day.

There are specific instructions I give clients about working with attorneys. It is currently in revision, but look here for news of this interesting document once it’s ready for distribution.

If you need this document sooner rather than later, contact me directly at jel@e911.com.

Crisis Questions: Working With Attorneys (Part 1)

Among the most frequent questions I get concern crisis management and legal situations that require working with attorneys. Here’s one example:

What is the best way to handle a crisis when you’re involved in impending litigation? That is, you’re not allowed to speak to the press and they’re writing negative articles about your company, because the other company involved is being interviewed and they talk. I’m actually being told to say, “No comment.”

Answer:

First, tell the boss he or she may need to hire better attorneys. Today’s defense lawyers must know how to operate in an environment of openness and almost constant chatter. The bigger profile a case has, the more people are communicating (especially insiders), and the more quickly one’s reputation and, perhaps, one’s career is defined by silence. Silence is the most toxic strategy in communications. Things happening outside the courtroom can affect what goes on in the courtroom. This is one of the reasons attorneys want so much control. Increasingly, though, these external communications and situational factors must be managed as well. Failure to respond or inform creates a perception of guilt. In this era where, increasingly, everyone is connected, many are journalizing. Failure to speak can be a very toxic strategy indeed.

Second, my attitude with all non practitioners, including lawyers, is that one of my most important responsibilities is to transfer what I know about how communications works in these special circumstances to those who have key roles to play in the scenario. I am teaching constantly. And, of course, the lawyers play an extraordinarily crucial role. What I’m saying is, ditch the attitude. Instead, gain some significant altitude. Look at the value you bring to the entire transaction and all the players, and work to make it work. Attorneys are used to being in control of everything in litigation. It’s pretty hard to challenge that. You have to be pretty good, pretty smart, and ready with some really useful, helpful, new information and approaches to have significant impact.

My goal is that everyone, especially attorneys, learn from what I recommend and talk about. During a recent meeting discussing a complex Web site for a defendant client, as the discussion ended, the lead attorney looked up and somewhat surprised said, “I think I have my opening argument ready now.” My response was, “Before we’re done you’ll have your closing argument, as well.” Arrogance? No, I knew I would help him; and so can you.

More later . . . .

Watch Your Language: A Lesson for Callous, Arrogant, and Insensitive Attorneys

What happened:

A Bridgeport, Connecticut federal judge awarded a teenager who had been victimized in a child pornography situation $200,000 for what the local newspaper called a, “well-heeled professional who downloaded images of her being sexually abused” (The News-Times, Tuesday, February 24, 2009, page A5; The Associated Press contributed to this story).

The defense attorney’s response to the ruling:

The first of its kind ruling drew this response from the defendant’s attorney, Jonathan Einhorn:

“It’s not a reasonable award when you consider the injuries this victim suffered related to what my client may have caused,” Einhorn said. “An award like this will probably open the floodgates.”

What this defense attorney might have meant:

“This kid is probably responsible for being in the circumstance she found herself in. She shouldn’t have been there in the first place. Where were her parents when all of this was going on?

My client is the innocent victim of readily available material on the Web. Those who produced it should be punished rather than my client, who had virtually nothing to do with it. This woman was not damaged enough to receive an award like this.”

What the defense attorney should have said:

“We abhor the abuse of any individual, for any reason. My client is already being punished by the court for his actions in this matter, adding this new burden will simply encourage others to attempt to do the same.

We will appeal this decision.”

Watch Your Language: C&NC Railroad

What happened:

“Rail Cars Have Towns Singing Freight-Train Blues” blares the headline in The Wall Street Journal, Monday, February 23, 2009 (page 1, jumps to A12). It seems that, with the huge slowdown in the economy, there’s also a slowdown in the need for rail cars. Most railroads have few places to store extra cars except on sidings spread all across America, for example, the small town of New Castle, Indiana. The train tracks often run within 25 feet of homes. Now those tracks are filled with empty, seemingly abandoned rail cars and the neighbors aren’t happy.

What C&NC said:

The WSJ contacted Spencer Wendelin, an executive with C&NC Railroad, who, according to the news article, has “little sympathy for the angry residents.” “The railroad, I’ll guarantee you, was there a long time before they bought their houses,” he [Wendelin] says.

The WSJ notes that “some folks have begun to worry that some of the rail cars appear to be listing and might tip over.” To which, according to The WSJ, Mr. Wendelin dismissed the fears as “completely unfounded concerns, based on both history and physics.”

Pressed for some kind of answer about the cars, which were becoming targets for vandals and roaming children and adults, and upon being asked when the cars were to be moved, Mr. Wendelin was quoted as saying, “If you can tell me when the economy is going to turn around, then I can give you an answer to that question.”

It appears to be no more Mr. Nice Guy for the town of New Castle, Indiana.

What C&NC meant:

Up yours . . . New Castle, bird to follow. Can’t you see that we’ve got problems? We were here first. You knew what you were doing when you put your house next to the railroad track.

We’ll move these cars some place else when we can. In fact, now that you’ve griped publicly, you can bet that we’ll clear out Ponsford, Minnesota before we’ll clear out New Castle, Indiana.

What C&NC should have said:

First, let me apologize on behalf of C&NC Railroad for inconveniencing those along our rights of way, where these surplus rail cars are now being temporarily stored. Clearly, we would much rather have the cars in service, moving goods and products to markets across America.

We have established a toll free telephone number, 1-555-SO-SORRY (1-555-767-6779), for residents in the various towns where cars are currently stored to contact us regarding excessive graffiti and cars that may appear to be leaning or becoming unstable. We have several teams of inspectors who will go to those sites, assess the situation, and meet with home owners to explain what actions, if any, can be taken, or what may actually be transpiring.

This railroad has had these tracks in place for seven decades, well before any of the houses that currently lie along them were built. We recognize that we are interfering with what used to be the normal lives of our neighbors and we’ll do what we can, under the circumstances, to alleviate their concerns. The reality, though, is that, in fact, these cars must be stored somewhere and mostly in places like New Castle and other smaller towns. We know this is a difficult request to respond to, but we are asking every community along our lines to bear with us as we move through the economic dislocation we and all of America are now experiencing.

You can believe me when I tell you that our number one goal is to get those cars filled with merchandise, products, produce, livestock, or manufactured goods, and get them on the move to future customers. Perhaps, on this, we can all agree.

Giving America the Bird*

Citibank, the receiver of billions and billions, decides to spend $400 million to put its name on the new New York Mets baseball stadium. Ten times the number of seats in that stadium is equal to the number of people who lost their jobs in two days just last week. What are these corporate bozos thinking? I’ll tell you. They think it’s your fault we’re in this mess. They have absolutely no responsibility to help out. They were trained at America’s most prestigious business schools that the game is won by those who take the most and spend the most.

Bailout rule number one: If you take the money, anyway, you belong to America, and you answer to America. At the rate Citibank is making goofy decisions, a countdown clock on top executive departures has been running for some time.

Wells Fargo Bank, another receiver of tens of billions of dollars, what do they do? They decide to stage a junket to Las Vegas as a “thank you” to dozens of their hard-working high-ranking employees. Lots of great activities were planned including free helicopter rides, special parties, gifts, get-togethers, and a grand time for everyone. Once again America gets the bird. What is it about these corporate moguls that makes them think up these personal embarrassments—then carry them out only to be caught like deer in headlights? These behaviors also illustrate yet another artifact of America’s premier business education and business environment, serious integrity deficiencies and a fundamentally amoral approach to the world. For the foreseeable future, while their subsistence is in the hands of every American, Wells Fargo employees should be satisfied with a hand written thank you from their CEO, delivered personally, at work. Everybody stays home. Why on earth, in the middle of a financial disaster, would a major bank choose the oxymoronic symbolism of going to Las Vegas to gamble? Seems like they’ve done enough of that already.

Bailout rule number two: If you take the money you become a public institution, those methods and models must govern how you spend any money. If there is even the slightest hint of impropriety or inappropriateness, such actions should be promptly admitted, rescinded, and retracted, then avoided.

Service Employees International Union (SEIU), this big New York union is running aggressively negative ads against the state’s interim governor because he is, among other things, cutting health care subsidies and funding. What does SEIU want? Apparently, its hospital employees and other member workers feel that they should not have to share in the pain of New York’s financial recovery. I guess the rest of us have to pay their share. I wonder how many jobs could be preserved for the dollars the union is spending on television advertising to take on a temporary Democratic governor. Once again America gets the bird. The SEIU seems to have enough management problems and other leadership issues as well as membership divisions to keep themselves occupied without having to threaten the interim governor of the state or intimidate its legislature.

Bailout rule number three: When the public’s pain is great, those who serve in public will feel the pain first. Then everybody gets to suffer to some degree—big shots will be transformed into little shots, littler people will fall less hard but be hurt as well. Anyone who feels they are exempt betrays the American spirit we need to get through this mess.

Wall Street and the SEC: Arthur Levitt Junior, in The New York Times Sunday magazine (January 25, 2009), responded to questions. His answers illustrate the flawed, troubling relationship this regulatory agency has developed with those it is supposed to be watching.

NYT: As the chief of the SEC under Clinton, are you kicking yourself for not having caught Madoff at his game?

Levitt: I believe that our commission was the most investor-friendly in the history of America. Bernie Madoff was simply not on our screen, except as a leading market maker.

My question: If you are an investor, do you feel the SEC should be your friend or somebody with a big club and shotgun, monitoring, analyzing, and penalizing those who go out of bounds on Wall Street?

NYT: Did you happen to notice the photographs of him [Madoff], or his pose in front of a series of Roy Lichtenstein lithographs of bulls?

Levitt: You see a bull in every Wall Street office. People on the street tend to be aggressive, macho, positive.

NYT: Do you ever feel as if you should apologize?

Levitt: For what?

Bailout rule number four: It’s time to pull the bull out of Wall Street, banking, investing, and insurance regulators. Their allegiances have to be to Americans, directly. Those they regulate should fear them. Those they regulate who mess up should be punished, publicly and harshly. Regulators and the industries they watch better hope Americans stay out of the streets if troubled times persist. It wouldn’t be hard to guess where people would go if problems fail to be resolved and the bull continues.

America gets the bird again.

Who in your community is giving America the bird, right now? I’d like to know. Let’s light them up and expose them for who they are, and what they’re doing.

* The bird is the name of an internationally recognized and derogatory hand signal where the thumb and first finger, fourth, and fifth fingers are curled inward while the middle finger is extended.

Watch Your Language: A Case Study of the Wells Fargo Communications Controversy

On Sunday, February 8, 2009, Wells Fargo ran full-page newspaper ads across the United States headlined: “The value of team member recognition.”

This defensive gesture follows their controversial decision to reward a number of high performing employees with a trip to Las Vegas, including special events and helicopter rides. There was a firestorm of criticism, nationwide, because Wells Fargo is the recipient of bailout funds from U.S. taxpayers. There are lessons here, for every business, about dealing with self-inflicted, bad visibility.

What Wells Fargo said (in their ad):

• All employers should evaluate how they spend money on employee recognition, especially if they have taken taxpayer money in the bailout.
• Media stories on employee recognition programs (like ours, sending employees to Las Vegas for a few days of gambling and relaxation) were deliberately misleading and one-sided.
• The media erroneously call these activities junkets, boondoggles, and waste, only for highly paid executives.
• Media misrepresentations have forced Wells Fargo to cancel all its major annual recognition events for the 2009.
• Our decision especially hurts those team members who worked long hours to provide good service.
• Other losers are the service workers employed to carry out these programs at hotels, restaurants, and airlines.
• The money comes from profits, not the bailout.
• Recognition spurs competition among employees to perform better. That’s a good thing.
• Since we’ve cancelled the face to face events, this ad will have to be our thank you to employees.

What Wells Fargo meant:

• We don’t see any issue with our behavior, but our PR people told us it didn’t look good.
• Generally, we are pretty good at these kinds of events. They’re fun, splashy and, hopefully, one ups our competitors. HR likes them.
• These events showcase senior executives doing something nice, for a change, in front of employees. What’s wrong with that?
• These events give employees something other than the current mess and embarrassments to talk and think about for a short while.
• Maybe those anti-banking reporters and editorialists who are making such a stink will think twice next time. This will show them.
• Why can’t Americans appreciate how tough this job is and what we sacrifice to serve them every day?
• We just don’t get it.

What Wells Fargo should have said:

• First of all, we are very sorry for what we should have recognized was a really dumb idea from the start.
• When our customers are suffering, our role is to share their pain.
• When our customers are paying for our lunch, we owe them special sensitivity to what we actually do, including the appearance of what we do.
• Our decision called into question management’s common sense and connection to what their employees and most Americans are feeling right now, every day.
• We greatly agitated and irritated our employees who are already scared and worried about their own futures.
• We believe firmly in the importance of recognizing outstanding performance. It is motivating. It helps employees cope; especially now when times are so tense, stress grows every day and everyone is worried about so many things in their lives, including their jobs, homes and retirement.
• We’ve done some serious soul searching and have come up with a different way to recognize our employees.

Employee Recognition

• The events and splashy stuff are definitely gone, as they should have been from the start.
• After holding exploratory conversations with just 3% of our employees, it was immediately and overwhelmingly obvious that employees preferred low-key localized recognition events.
• Having dinners, lunches or even simple events in important local spaces was suggested. For example, rent a local elementary, middle school or high school cafeteria, or a train station lobby, local library or the common areas of other public buildings. Local college campuses would also work. These facilities can use the rental income and perhaps the visibility.
• Use simpler, private, personal hand-written notes of recognition.
• All employee comments are on the Website for those who care to review them.

From now on our recognition processes will have to pass four tests. This approach will prevent what happened this year from ever happening again.

1. Can we afford it?
2. Are they simple, sensible, and in proportion to what was accomplished or expected?
3. Is the recognition process part of an ongoing individual evaluation strategy rather than just a single big PR burst once a year?
4. Is the entire effort geared to truly recognize individual employees and teams rather than a black tie boost for executives? Is it largely run by employees rather than the managers?

50,000 Feet: Restoring Confidence

Restoration of trust in business and government to manage our complex economy will only return when the most essential ingredient of ethical behavior is addressed openly and vigorously—the integrity of business leadership. It’s going to be a tough sell.

I recently attended a meeting of communicators primarily involved in financial communication—banks, Wall Street, real estate, and some very large financial businesses. The banking communicators were busy explaining how difficult it was going to be to figure out how to resolve the mess created in the mortgage markets and elsewhere. As they fumbled, stumbled, mumbled, and bumbled through things clearly too complicated for me to understand, I raised my hand and said, “From the public’s perspective, only three things are necessary to resolve the banking crisis and re-establish trust. 1) The leadership of one or more individuals in whom the public can have absolute faith and whom, perhaps, these organizations genuinely fear. 2) All of the financial organizations and institutions that failed need to begin begging for increased regulation and oversight, as they vigorously and sincerely apologize and take responsibility for the horrendous damage they have caused so many people, families, and businesses across the planet. 3) Many business operators will have to lose their jobs and go to prison as a result of their behaviors. Even though much of what happened was deregulated or unregulated and, therefore, was thought to be unpunishable, an angry, direct message needs to be sent to the financial marketplaces. Enough already. The bottom line for these communicators? “We’re not all bad guys.” That’s really helpful.

As for those who are getting or anticipating a bailout . . . we’re still waiting for a little humility and plans for extraordinary openness about what these companies plan to do and actually do with the money. If you take public money, you have an affirmative obligation to report the uses and plans for those funds, and validate that they are being put to the use that was intended by the public, as though you had become a citizen-owned public company. When you take public money you, in fact, become the public’s property.

My Forecasts:

1. Expect the opposite. There will be even bigger bonuses for bankers, Wall Street types, insurance executives, auto executives, the new banks and financial institutions created, and their financial geniuses. They believe they deserve to survive.
2. The seeds of the next crisis are being sown as we dig out of today’s problems. Business regulation always tends to protect profitability, wealth, and survival.
3. The reality of regulation is that those who make the regulations end up profiting from them.
4. Regulation generation will create a tremendous industry of lawyers, ex politicians, and former government and corporate functionaries who will fight any new regulatory structures until they are imposed. Then these same individuals will find ways to get around the new regulations, through them, and profit from them all over again.
5. Business leaders with integrity begin to step forward and raise their voices in support of better behavior.