Tuesday, April 16, 2013


MANAGEMENT FAILURES CONTINUE
TO CAUSE PR NIGHTMARES

By Richard E. Nicolazzo

I’m often asked why crisis communications counselors are so busy.

One needs to look no further than the management failures that recently occurred at Rutgers University.

PR nightmares at prestigious institutions continue accelerating at a rapid pace. In the case of Rutgers, a number of administrators were involved in a decision to “rehabilitate” (rather than fire) basketball coach Mike Rice whose outrageous, abusive behavior was caught on video and leaked to ESPN.

Give university president Robert Barchi credit for taking responsibility, but the damage had already been done. “This was a failure of process,” he said at a press conference. “I regret that I did not ask to see this video when Tim (now the former athletic director) told me of its existence.”

Quite frankly, it’s hard to imagine that an experienced university president would not ask to see a video of this nature.

The PR fallout from this episode was swift and damaging. Even the governor of New Jersey got involved. Besides Rice, athletic director Tim Pernetti, interim senior vice president John Wolf, and assistant coach Jimmy Martelli all quit. Four careers permanently damaged for no good reason.

Other examples of poor judgment abound.

J.P. Morgan Chase & Co. CEO James Dimon had his reputation sullied when risk managers didn’t do their job. A report by the U.S. Senate’s Permanent Subcommittee on Investigations found that the bank’s top risk manager had called warnings about trading losses “garbage.”

Due to engineering failures, Boeing’s launch of the 787 Dreamliner turned into a PR fiasco. According to a report in The New York Times, when testing the batteries before production, engineers relied on the same test used for tiny cellphone batteries to gather data about the safety of the heftier lithium-ion units on the new jet.

The Jerry Sandusky debacle at Penn State is another prime example of what happens when senior leaders in key positions fail to use sound judgment. At a recent Pennsylvania state senate hearing, a senator stated that the PSU board was left “flat-footed” because former administrators such as Graham Spanier, Gary Schultz and Tim Curley testified to a grand jury but most of the board didn’t even know about it.

Maintaining Institutional Integrity

In a disturbing, reoccurring pattern, we are seeing large organizations make decisions that impact their institutional integrity. It’s as if they have lost their moral compass. Despite the world of communications we ive in, senior executives and administrators are not protecting the integrity of management and the brands of their institutions.

How does crisis management play into this dynamic?

Very simply, top inside communications executives and trusted outside counselors are usually not at the decision-making table.

Let’s play out the Rutgers situation a different way. A meeting is held in the president’s office and all the facts are laid out (including playing the video). A senior VP of communications at the college or a veteran counselor from an outside firm specializing in crisis management gets to opine on the matter.

Having been in similar situations during my 30-plus year career, I’m hard pressed to believe that the counselor wouldn’t warn about the need to understand that the institution they represent is larger than one individual, and that serious PR and reputational damage would ensue if the coach was allowed to stay.

Just think about Joe Paterno’s behavior in the Sandusky scandal. For years, he thought it was all about Penn State football and his legacy. When the story came out, it was the institution that suffered the most damage.

Bad decision-making at the senior management level is having an effect on crisis communications. Increasingly, crisis teams are called into situations where operational failures cause spiraling crises.

This creates an environment in which senior executives call in the communications team after the fact and ask them to “spin our way out of it.”

In my view, spin is long dead.

People are simply too smart to fall for lame excuses like the ones that Rutgers trotted out. Anyone with sound judgment and values who watched the video would have concluded that the coach had to go immediately.

While the position of senior communications executive has been somewhat elevated in recent years, there is still a long way to go.

Now is the time for management to put the insights, perspective and street smarts of communications executives to work at the decision-making table.

Right next to the CEO would be perfect.

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