Crisis Guru

What Are the Attributes of the Ethical Executive?

jel@e911.com (Jim Lukaszewski) — Tue, 17 Nov 2009 16:58:00 +0000

For some time now, I’ve been conducting my own completely unscientific “poll” of senior advisors, asking them, from their experience, to provide up to 10 attributes of executives with integrity. The question I asked was, “What are the characteristics, behaviors, and attitudes of the ethical executive?” I asked each individual for 10 examples. Here’s the list from a superstar mid-30s female:

Honesty
Integrity
Fairness
Confidence
Vision
Ability to view issues through multiple lenses
Ability to flex communication styles for critical conversations
Ability to take feedback
Appreciation/gratitude
Responsiveness

Then there’s this from a late 40s top-notch consultant:

Truthful
Courageous
Honest
Respectful
Compassionate
Just
Humble
Wise
Responsible
Reliable

Here’s the list from a Ph.D. college professor:

Honesty
Integrity
Accuracy
Transparency
Accountability
Fair
Responsible
Loyalty
Truthful
Professional

And, how about this from a late 50s senior agency counselor:

Honesty
Moral understanding and conviction
Uncompromising (re: established standards)
Versed in acceptable social norms
Fair
Unwilling to accept double standards
Willing to share information (transparent)
Leads by example
Believable
Mature value structure
Teacher/ethical evangelist

So far, honesty and truthfulness appear on three out of the four lists. Ultimately, I think I’d like to begin creating a roster of executives who meet a great proportion of these attributes, because we only tend to hear about those who succeed or fail in spectacular ways.

My experience is that there are very few lessons to learn from those who fail. The models we need are those who have consistently demonstrated the qualities of ethical behavior, integrity, and credibility as defined by those around them.

What’s your list? Who are your candidates?

Send these to me and I’ll publish them. We’ll create a matrix of ethical executive expectations, and then, the next step will be to ask for nominations of individuals who manage and lead in the space called “integrity.”

The Growing Threat to Trial Lawyers: Apology

jel@e911.com (Jim Lukaszewski) — Wed, 07 Oct 2009 19:36:00 +0000

An interesting article in the Wall Street Journal recently highlights one of the most interesting phenomena occurring in the legal world. It’s the phenomenal power of apology to avoid litigation, manage legal crises, and be the most powerful crisis management tool.

The article’s title sums it up, “Hospitals Own Up to Errors, Some Find That Confronting Mistakes Reduces Litigation and Future Mishaps.”

Hospitals, especially, and other health care facilities are learning that owning up to their medical mistakes or the perception of poor performance promptly can significantly reduce litigation and, at the same time, prevent future similar mishaps, or perceptions.

The “I’m Sorry” movement in America is long, strong, and growing. Just visit http://www.sorryworks.net/, a Web site devoted to prompt, aggressive, and candid disclosure of medical mistakes and errors. In the Journal article, Dr. Timothy McDonald, a pediatric anesthesiologist and chief safety officer at the University of Illinois Medical Center said: “Since the hospital undertook much more aggressive patient/staff communication, and in 2006, established a policy of fully disclosing medical errors, apologizing when they occurred, and swiftly offering a financial settlement, law suits against the Center are down 40 percent compared to the period between 1999 and 2004.” “Yet,” he said, “the number of procedures increased 23 percent.”

Dr. McDonald said, “While we can’t say for certain that the disclosure program was responsible for the decreases, we can certainly say that it has not caused an increase in law suits or payouts.” I’ve witnessed similar experiences in my health care practice all across America.

The lesson is that the faster we sincerely apologize for mistakes of any kind, while there may need to be claims filed and settlements made, the threat of aggressive, costly, time consuming litigation is significantly reduced or goes away very rapidly.

Many in the legal profession remain against aggressive apologizing, claiming that it will increase lawsuits and payouts. But years of evidence is accumulating that prompt acknowledgement coupled with clear apologies and sensible offers of settlement can eliminate the litigation phase of legal interaction between victim and perpetrator, in favor of an attitude of settlement.

Yes, apologies are legal admissions and they come with a price, but they also have an extraordinary benefit — significantly limiting or eliminating litigation.

My advice to attorneys? Begin learning how to aggressively, constructively, and promptly settle matters rather than rattle the saber, slap victims around, or take an aggressive “blame the victim” posture. Increasingly, my litigation practice focuses on prompt settlements (even within 24 hours) and helping clients manage the victim dimension over the long term.

In America today, fewer than 1 in 100 civil or criminal cases filed ever get to trial. Even when litigation is threatened, the reality is that the vast majority of cases are going to be settled, mediated, negotiated, dismissed, or dropped.

In my experience in these matters for nearly 30 years, the smallest check the perpetrator is ever going to write is the check that is written today. Thirty-three states have passed laws preventing juries from considering voluntary apologies at car accident scenes in awarding damages. Twenty-one states have passed laws providing medical workers with similar protection should their case get to trial.

Will the pushback from attorneys continue? Yes it will. As one general counsel told me recently, “We’re not the empathy department of this company.” Watch for my blog on lawyer empathy coming very soon.

The future for litigation is clear and the trend is down. It all begins with those two little words: “I’m sorry . . . and we’ll make it right.” Attention attorneys: Start practicing these two little words today.

If you’re interested in starting your empathy lessons early, send me an E-mail at jel@e911.com requesting: Empathy Lesson #1, Managing the Victim Dimension.

For Crying Out Loud

jel@e911.com (Jim Lukaszewski) — Thu, 01 Oct 2009 15:31:00 +0000

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:

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

jel@e911.com (Jim Lukaszewski) — Mon, 31 Aug 2009 21:36:00 +0000

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

jel@e911.com (Jim Lukaszewski) — Fri, 07 Aug 2009 21:39:00 +0000

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:

Tie all investment transactions, of every kind, to real dollars (or currencies) and common sense.
Prohibit and eradicate all transactions that fictionally expand (leverage) the value of any underlying investment, including speculations, indexing, and derivatives.
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.
Require extreme transparency for all transactions and related activities.
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.
Establish state-based offices to oversee and regulate Tax Subsidized Organizations (TSOs), currently known as Not-for Profits.
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?

jel@e911.com (Jim Lukaszewski) — Tue, 07 Jul 2009 18:14:00 +0000

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:

Are customers mentioning it as they come-in or cancel their orders, reservations, appointments, or activities?
Is this the subject of conversation among franchisees, related businesses, allies, partners, or employees and their families?
Is there chatter, at any level, about it on the Web, YouTube, Twitter, Facebook, or in chat rooms?
Have the bloviators, bellyachers, back bench complainers, or cable news fabricators been mentioning it more frequently?
Has there been an unexplained blip, positive or negative, in sales, reservations, orders, appointments, or collaboration requests?
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

jel@e911.com (Jim Lukaszewski) — Tue, 16 Jun 2009 21:37:00 +0000

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.

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.
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.
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.
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.
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.

Let’s Keep Gitmo Going

jel@e911.com (Jim Lukaszewski) — Wed, 27 May 2009 20:37:00 +0000

Actually, if you think about it, Gitmo is being underutilized. It’s true that all of those dangerous terrorist types are being held there for the time being and the prison itself has become a political football, but the fact is that Guantanamo is a state-of-the-art facility and we have additional uses for it. There are others who need to be warehoused there.

Let’s use Gitmo as a place to put spammers, hackers, and bad bankers. Bernie Madoff and all of his playmates who defrauded us could be put there. It could become a special prison for those who cause mass misery, fear, or destruction.

Who knows, perhaps Cuba and the U.S. could work out a cooperative arrangement to turn the prison into a famous tourist destination. Marriott could put up a Courtyard or Residence Inn and the U.S. Postal Service could install a special letter cancelling facility. Maybe an adroit entrepreneur could build a casino there to help attract traffic and offset some of the costs of the prison.

We need Gitmo. It ought to stay an active facility for these special kinds of trouble makers and societal miscreants.

Nominate your favorite candidate to occupy the new Gitmo.

Crisis Management Questions: Working With Attorneys (Part 2)

jel@e911.com (Jim Lukaszewski) — Fri, 22 May 2009 19:56:00 +0000

Some things to think about:

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.
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.
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.
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.
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.
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.

One of America’s Top 10 Crisis Management Problems

jel@e911.com (Jim Lukaszewski) — Thu, 21 May 2009 20:23:00 +0000

American-based Terrorist Training Camps: U.S. Prisons

The Bronx synagogue/Stewart airbase attackers, whose operation was foiled in its execution, are Americans who have gone through the U.S. prison system.

America currently houses two million men and women in prisons across the land. This is an average of 50,000 prisoners per state. Judging by what we know of the terrorist “cell” broken up in the last couple days in New York, three things become quite apparent (based on the histories of those captured). They are products of the American prison system. This system produces three things:

Converts to Islam (the fastest growing religion in America and in American prisons)
Hatred of America
Criminals with more criminal experience

By the end of this year, 900,000 prisoners will be released back into American society to be replaced by an equivalent or larger number going in for training, indoctrination, and heightened criminal motivation.

Who’s talking about this issue? Shouldn’t someone be talking about this issue?

Crisis Questions: Working With Attorneys (Part 1)

jel@e911.com (Jim Lukaszewski) — Mon, 18 May 2009 19:24:00 +0000

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 . . . .

Bad Advice: Even a Dying Newspaper Can Throw a Knock-Out Punch When Threatened

jel@e911.com (Jim Lukaszewski) — Fri, 08 May 2009 18:41:00 +0000

When the New Jersey Hackensack University Medical Center learned that a very negative story was going to run in their local paper (The Bergen Record), just before the article appeared the hospital contacted the newspaper and told them that if the story ran the paper could no longer be sold at the hospital gift shop or in newspaper boxes; subscriptions would be ended; the hospital’s ads were to be removed from the media group’s Web site; and the advertising contract canceled.

Even a nine-year old can figure out how this story ends.

The article appeared, including commentary on the hospital’s preemptive actions and by noon, the newspaper was receiving apology phone calls from the hospital’s Board of Directors. Seems these stalwart gentlemen from the community accustomed to entertaining suck ups, naïvely believed that at most, the newspaper would knuckle under and, at the very least, would keep their names out of the paper. There was neither sucking nor anonymity.

Bad thinking. Dumb advice. Self-inflicted crisis creation, rather than crisis management. Predictable bad result.

Ironically, the daughter of the North Jersey media group’s chairman, Malcolm Borg (they own The Record), serves on the hospital’s Board. According to an account in The New York Times she had recused herself from most decisions having to do with newspaper.

In more than three decades of practice, every time I have seen this tactic tried, it blew up in the faces of the perpetrators, triggered longer-term damage and sanctions, and forced significant management change at the top of the organization. Reminds me of the story of the kid holding up the dairy store. He had a gun, he pulled the trigger, nothing happened. He looked down the barrel and pulled the trigger again. This time the weapon took his head off. The clock is ticking on whose head will role for this gaffe.

If you’d like more details, see The New York Times, May 4, 2009, “A battle with a New Jersey Newspaper Backfires.”

David Ogilvy Must Be Spinning in His Grave

jel@e911.com (Jim Lukaszewski) — Fri, 10 Apr 2009 21:46:00 +0000

David Ogilvy (June 23, 1911 to July 21, 1999) must be spinning in his grave.

Known as the “Father of Advertising” and someone a half century ago Time Magazine called “The most sought after wizard in today’s advertising industry,” Ogilvy was most notably known for expanding both the bounds of advertising creativity and the morality of advertising.

Imagine what David Ogilvy would say today as, according to O’Dwyer’s PR Report, “PR pros, advertisers and trade groups are crying foul over proposed updates to guidelines concerning endorsements and testimonials in advertising . . . . ” by the Federal Trade Commission (FTC).

It may be true that if these regulations are passed, they will cause sweeping change in the way products, ideas, and concepts are presented to consumers. In what way, you ask? Advertising, marketing, and PR might be a lot more truthful.

Industry positions, including my own profession, would have Jack Nicholson looking at you and saying, as he did in A Few Good Men, “You can’t handle the truth.” Sounds to me like there’s going to be a need for extraordinary crisis management and reputation recovery preparation.

Let’s see. What would actually happen if these regulations were approved? One example frequently mentioned is the product disclaimer, “results may vary.” Under the new regulations, this disclaimer would be replaced by very explicit descriptions of the variations in service, quality, appearance, etc. In another case, the pretty young actress advertising or endorsing a product must actually have used the product and gotten a result, or her limited use (or non-use) of the product must be disclosed in the ad. How about having “consumers” who endorse products in an ad be required to actually use the product, or if actors or non-users are used in the ad (and paid for their words), this must be disclosed prominently along with the advertised product. And here’s a big one, those reviewing a product, service, or an experience (such as in tourism) must disclose if they received the product for free and/or if they were paid to provide a review, or given something of value, e.g., a fishing vacation, to write about the fishing.

It is absolutely bazaar to listen to “communicators” obfuscate and whine about what’s being proposed. Dan Jaffe, Executive Vice President of Government Relations for the Association of National Advertisers, quoted in O’Dwyer’s PR Report (in April 2009 issue) said, “These disclosures go too far, are too restricting and make it impossible to apply useful information for consumers.”

It’s Jack Nicholson, again, being asked to tell us that we “can’t handle the truth.”

Other arguments against these regulations are typically silly. One argument is that the regulations create too much room for subjective interpretation. What are they talking about? The Public Relations Society of America (PRSA), of which I’ve been a member for decades and a member of its Board of Ethics and Professional Standards for much of that time, provided the circumloquitous observation that “striking a balance among governmental interests to protect consumers from deception, the proposed updates . . . are not sufficiently clear to prevent confusion and uncertainty that will have communications professionals without adequate clarity to advise the clients who rely on them.” What a pile of crap.

These industry positions raise ethical questions that deserve serious thinking and public exploration. If the goal is something other than the truth, than what is the goal?

Well, get set for some interesting stories. A number of organizations, including the Association of National Advertisers, are threatening to go to court if the FTC pursues its regulations.

Going to court on this issue reminds me of the story about the crook who staged a robbery using a pistol. Out of anger, he fired the pistol, but nothing happened. So he looked down the barrel and pulled the trigger again. It worked this time.

My prediction? Communicators, public relations practitioners, advertisers, and marketers are going to be ripped to shreds and laughed to pieces. Where should these organizations and Jack O’Dwyer’s PR Report (which editorialized along with its marketing colleagues against FTC regulations) be:

Consumers ought to be able to get as much information as possible to make up their own minds. Information by professional communicators should be clear, concise, constructive, and aggressively truthful.
The notion that too much information will confuse consumers is demeaning and arrogant. This notion insults every consumer from the 95-year old who is struggling to understand the opaque phrases of the debate (like PRSA’s) to the four-year old who is enticed by the fancy packaging of a product only to open the box and find far less than what was anticipated, whether it’s cereal, a toy, a gift for mom, or just something he or she wanted to have to feel good.
If a food product comes packaged in a wonderful box with pictures of all kinds of fruits and flowers on the cover, but only one or two of those fruits and flowers are actually in the product, do you really have to ask if this is a truthful depiction of this product? A six-year old could figure this one out.

The sophomoric level that this discussion is about to take was typified by O’Dwyer’s PR Report editor, John Gingerich (in an editorial in the April 2009 issue), who said it best when, at the end of a stumbly, mumbly, fumbly, bumbly, and silly 250-word editorial opposing the regulations, he summarized, “If the messages are truthful—if they motivate and captivate audiences to set goals and achieve for themselves—who cares if the spokesperson, some impossibly perfect veneration of our cultural plasticity, has never used the product? We want to see stupid, beautiful people on T.V. At least I do.”

After reading this, do you really have to guess who really can’t handle the truth?

David (Ogilvy), rest easy, old friend. This time the government is here to help.

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

jel@e911.com (Jim Lukaszewski) — Fri, 27 Feb 2009 21:09:00 +0000

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

jel@e911.com (Jim Lukaszewski) — Tue, 24 Feb 2009 20:35:00 +0000

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*

jel@e911.com (Jim Lukaszewski) — Fri, 13 Feb 2009 22:37:00 +0000

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

jel@e911.com (Jim Lukaszewski) — Mon, 09 Feb 2009 15:38:00 +0000

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.

Can we afford it?
Are they simple, sensible, and in proportion to what was accomplished or expected?
Is the recognition process part of an ongoing individual evaluation strategy rather than just a single big PR burst once a year?
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?

Crisis Management: Companies Get the Unions They Deserve

jel@e911.com (Jim Lukaszewski) — Mon, 02 Feb 2009 21:28:00 +0000

The Employee Free Choice Act of 2009

According to The New York Times, 2008 saw the largest rise in union membership in a quarter century in the United States. The number, from the Bureau of Labor Statistics, was a gain of 428,000. According to The Times report, most new members were in government employment or education. If the Employee Free Choice Act (EFCA) passes, which is highly likely, there may well be another spike in union membership in America, probably starting this year.

Why does this law have such a great chance of passage? It’s because corporate tactics against unions and against this legislation have been incredibly negative, arrogant, and insulting to workers. Let’s look at the pattern:

Anti-union forces in business cite the levels of corruption in labor unions, the convictions of labor union leaders, and locals under supervision. The conviction and firing for cause of CEOs and senior business leaders, if not equal to, probably surpasses the number of union leaders who have been sentenced, are serving prison terms, or who have been otherwise prosecuted.
One business strategy is to discredit and disparage the concept of unions, their leaders, and the employees who show an interest in being represented. In other words, those who join unions feel victimized by business. So, business responds with aggressively negative intimidation, ridicule, and bullying, thus assuring further victimization and greater union loyalty.
Business owns everything (e.g., the jobs, assets, markets, resources, and even the future). Union employees only have a contract—a piece of paper or perhaps a small pamphlet—that keeps them from speaking directly to their managers and leaders, and dictates that they talk through someone who, odds are, they would rarely invite home for Sunday family dinner.
When union members attempt to correct their earlier judgment and decertify their unions, a decision only employees can make, management tends to jump in behind the scenes using the same negative, bullying, denigrating, and discrediting tactics I’ve just described. When this happens, of course, decertification fails.

Let me amend my statement: Unionized companies get the unions they deserve and seem to work very hard to keep them.

I know something about the attitude of union workers. I grew up in a labor household. My father was a shop steward for 29 years. He talked and acted like a victim of the Minneapolis public school system for most of his working adult life. I think he went to his grave regretting that he was never able to lead an illegal teachers strike against the Minneapolis school board.

The mistake management makes is to wage war instead of peace. It may be too late to defeat the Employee Free Choice Act. Business is using its same old tactics—fear, bullying, defensive threats, and whining. Now it’s time to begin preparing for whatever comes out of Congress this year and, perhaps, a modest increase in organized labor membership in the next few years. Here are the most important steps:

Learn how to wage peace with your employees, at every level, every day.
Dump the warriors, confrontation artists, and those who disdain, demean, and discredit. They are toxic to your relationships.
Get rid of friends and associates who call this approach one for “sissies”. It isn’t their war. It isn’t their peace.
Forget the employee surveys of satisfaction and other metrics. Get into the trenches and talk to everyone face-to-face. Commit yourself to getting to know as many employees as you can, their families, and the things that concern them. Every employee survey I’ve seen, even those from Fortune’s Best Companies to Work For, illustrate that most employees have two basic questions all of the time—“Does anyone know I’m here?” and “Does what I do really matter?” This is fertile ground for the organizer because the groundwork has been laid for employees to feel like victims most of the time.
Fix it now. Change it now. Question it now. Challenge it now. If business thinks its employees deserve better, business leaders had better start acting like it. If not, you better think about adding a bargaining table to your office furniture before the end of the year.

How to Keep the Job You’ve Got

jel@e911.com (Jim Lukaszewski) — Fri, 23 Jan 2009 22:21:00 +0000

As I’m watching the hundreds of articles, reading the checklists, and listening to the bloviation about finding new employment and planning for your future when you lose your current job, it seems to me that we’ve overlooked the most important and simple solution—doing our best to keep the job we’ve got.

It seems to make sense that keeping the job you’ve got is a lot easier than trying to find another one, then another one, and then another one. Here are, from management’s perspective, the behaviors of those employees that have the most value, most of the time. These employees are likely to be retained when cuts or worse have to be carried out:

Do your job. Understand what your job is, get a job description, figure it out, and do it.
Make your budget or sales goal, if you have these responsibilities.
Make the plans or strategies you’re engaged in actually work.
Help others succeed and accomplish their part of the plan.
Reduce stress, tension, and contention. Be a peacemaker.
Get along. Help others be more comfortable in what they’re trying to accomplish.
Be a finisher. Get things done. Wherever possible, stop those things that will never be done.
Be a source of inspiration. Help others have better days. Most of the time, others will focus on what really matters because that’s what you are doing.

Did I miss anything?

For more information about layoffs, visit the article in my eNewsletter, The Dark Art of Laying People Off.

How to Lose a Job

jel@e911.com (Jim Lukaszewski) — Fri, 23 Jan 2009 22:11:00 +0000

As crazy as it seems, in times like these, there are people who are intent on getting high up on the list of people we can do without. When we look at who is on the list of people to separate first, here are the kinds of behaviors and attitudes that surface:

Making the boss mad by barking, shouting, or simply talking back.
Denying what everyone else already knows or what really was true—whether good, bad, or somewhere in between.
Getting angry and threatening others.
Acting like you’re a victim of forces beyond your control, but forces that should be controlled if those in charge really cared.
Trivializing real threats to the organization by focusing on just yourself; avoiding the truth.
Claiming that you’re being treated unfairly.
Minimizing the damage that your own behavior is causing and asking irritating, irrelevant, insolent questions.

If this is you . . . even if it’s only one or two of these behaviors or attitudes, you might want to examine your life and your attitudes. The more items on this list that reflect your daily habits, the more likely it is that, relatively soon, you’ll be working for someone else or not working at all. These are job killers.

For more information about layoffs, visit the article in my eNewsletter, The Dark Art of Laying People Off.

All Book Reviews Should Be This Good

jel@e911.com (Jim Lukaszewski) — Thu, 22 Jan 2009 22:05:00 +0000

Very recently an unsolicited, cool review of my new book, Why Should the Boss Listen to You? The Seven Disciplines of the Trusted Strategic Advisor (Jossey-Bass, 2008), appeared on amazon.com. Take a look. I’ve never met this gentleman but, obviously, we’re going to be friends for life.

Much more than it first appears, January 2, 2009
By Dr. Don Malnati (LBK, Florida 34228)

Why should the boss listen to you? Sweet book. A sophisticated analysis. The top is fast and complex. You read him think and analyze through issues with a decision maker.

Far more than it first appears. A real look at the soul of what good business can be. Everything could be like this, e.g., health care, politics . . . . James Lukaszewski (Loo-ka-SHEV-skee) (szew=SHEV am I the only one that didn't know that?) sketches the boss, inner circle, advisor and staff. Explains each player. How they fit together, where they are coming from and how you contribute. The big picture is there when you finish. He has some good visuals and many lists.

7 Disciplines
5 Imperatives
4 Things to do
5 Flawed strategies
9 Things a leader expects
11 Things you need to know to work with a boss
3 Lists of questions to consider. Nice learning device.

Leaders get an unfair beating, especially from the corrupt drive-by-media. Humans like to work, leaders like to lead. Lawyers and media egos like to screw things up.

Too many books could be a pamphlet, not this one. “Managers test before they trust.”, a nice thought I liked in the section on trust. Something like that on every page. On half the pages I wrote a comment. An enjoyable read of deep material. His thoughts reveal a life that works. This body of work is a protein meal.

I Love this book.

The CD is like an outline, How to Develop the Mind of a Strategist, $10 from amazon.com.

Get comfortable, close your eyes, listen. Or go to the seminar.

My favorite on the CD is not in the book. It is a seven-word summary of everything you need to know about unions. It is NOT negative. The 7 words will make your company better. Or the 7 words will make your union better. Get the CD, find the 7 words. You will remember them. You will use them. You will appreciate Jim, say more with less.

The book is very, very good. You will not be able to read it only once.

You will listen to the CD once, but the one phrase is worth $100+.

Where Have All the CEOs Gone? The Succession Crisis of 2009

jel@e911.com (Jim Lukaszewski) — Mon, 19 Jan 2009 15:56:00 +0000

Following on the heels of the SEC’s devastating options backdating scandal, which caused as many as 200 CEOs, general counsels, and CFOs to lose their jobs, we enter into another, even more frantic period of CEO departures. Economic events are accelerating the timetable for CEO departure. When the news gets bad and stays bad, it’s the CEO who receives extra scrutiny and a shorter lease on the executive suite. The trusted strategic advisor needs to be plugged into the succession strategy or have a fundamental understanding of the succession process. The CEO’s sudden departure can be overwhelming.

The important news for most staff functions, including communications, is that a change in CEO is less likely to cause a change in senior staff functions, at least at first. The CEO’s departure does present two significant opportunities to the trusted advisor—whether internal expert or external resource. The first is assisting in a graceful, prompt, and relatively painless exit for the current CEO. The second is developing a strategy for the successor’s first 100-to-900 days. The roughest part is managing through the politics, competing personalities, and posturing during the period of departure and accession.

There are recognizable patterns in CEO and successor behaviors during departure scenarios that the skilled advisor can anticipate and then be extremely helpful to both the departing CEO and the successor. Here are the most interesting patterns in the CEO departure scenario.

Weirdness

Everything becomes strange and sort of fuzzy as the organization enters a period of succession. This begins, of course, with the more or less formal announcement that, at some point in the near future (hopefully sooner rather than later), the existing CEO will depart, and a process has been initiated to find a replacement or a replacement is about to be named. Succession is one of the highest stakes games in corporate management. Lots of senior people are jockeying to be considered and/or at least included in the process and the new power structure.

Only a few people get to play, and most power centers become unstable for the period of time it takes to complete the cycle from announcement to search, to selection to CEO departure. It just gets really weird. For the potential successors, they are moving into a world that is beyond real and beyond belief, and sometimes petty and silly all at the same time. This is the successor’s weird world. Every individual I’ve coached through these circumstances has told me that, no matter how clearly I forecast the weirdness, it was even weirder in real life.

The Five Phases of Departure

Phase One: Posturing

The posturing of possible internal successors is evident, as is the development of internal centers of influence, in the search to determine just how the succession decision will be made. Every organization handles this process differently, every time. The person generally driving the succession scenario is the departing CEO.

Phase Two: Plotting and Placating

The longer it takes to announce a successor, whether from the inside or the outside of the organization, the more time the organization wastes getting ready. Statistics show that the insider or outsider faces the greatest risk of failure in the first 18 months. Once the new CEO is on board, there is an expectation of immediate performance, even before they have found the bathroom.

The odds of real success favor the insider over the outsider almost every time. The key is the current CEO’s departure date. If that date is longer than 12 months, there’s going to be an enormous amount of individual and collective agony as the process proceeds. Individuals fall in and out of favor, in and out of contention. The air is thick with politics. The organization holds its breath the entire time.

Phase Three: Legacy

The departing CEO begins to put in place or favor programs, projects, and ideas that he or she would like to see live well beyond his or her stewardship. The CEO usually begins talking about accomplishments and what he or she hopes to see survive over the long haul. This behavior is quite natural. While it drives all potential successors to the brink of distraction, so long as the boss is the boss, he or she gets to say these things and to build his or her legacy, which is a major preoccupation during the remaining weeks and days of his or her term.

Phase Four: Immortality

In scenarios where the current CEO’s departure date is greater than 12 months, the CEO has time to make some very extraordinary moves that cement in place the company they created, and to prevent the successor from changing or altering what has been done. The most powerful gambit is to sell all or part of the company before or, some times, after naming a successor. Another way to assure that an organization will keep the departing CEO's stamp is for the departing CEO to reshape the organization in a way that makes it difficult to reformat once he or she leaves. Immortality behaviors extend until the moment the CEO walks out the door, longer if he or she can reach in and keep in and keep tweaking it, as a Board member, for example.

Phase Five: Slow Motion

Will he or she ever leave? The CEO, as the date of departure approaches, begins to have second thoughts as to whether the company can function, even with a hand-picked successor. If that successor is named more than 12 months prior to the exit of the CEO, the odds of that individual remaining a successor diminish by month. The existing CEO may begin to torpedo the successor at every turn.

My advice to departing CEOs: announce your departure time up to 12 months ahead and surprise everyone by leaving three months early. As soon as the successor arrives, leave the building and go tour the provinces. Come back only occasionally for sentimental visits—to be honored for your service, achievements, accomplishments; and to recognize those who helped you complete your service, supported your achievements, and helped you to have a career of accomplishment. If the former CEO is going to hang around a while, at least for the first year or so, establish a separate office in another building or some distance away.

Keep in Mind

Four powerful process success ingredients to keep in mind as the “play” of succession proceeds:

Any potential successor needs to maintain their relationships with everyone on as an even a keel as possible, especially the departing CEO. Making this happen is part of the senior advisor’s key role in succession. CEO and successor must stay in regular communication throughout the entire process. It’s the CEO who generally cuts off communication fairly quickly.
Most successor candidates must control their frustration, and resist and control the urge to make or suggest changes before getting the mantle of leadership. There is only one CEO at a time. It hacks off the boss. Steps may be taken to prevent changes from taking place, and pushing change can prevent succession. The senior advisor counsels patience, a focus on exceptional performance, and assisting the CEO wherever possible in achieving his or her objectives until their departure, and to be kind and in contact afterwards.
Anything the boss did during his or her tenure can be undone, redone, or reconstructed once a new CEO is in position, but only after the mantle of power is transferred. The senior advisor needs to be extremely cautious about making plans and engineering changes before the power to accomplish things has transferred to the new leader. Once the mantle of power is assumed, the world changes dramatically and permanently for the person in charge. Be ready for the mental and emotional transformation. When there is failure to perform, former CEOs now frequently return to manage organizations where their successors failed to work out.
The average tenure of a new CEO has declined to 41 months—1,890 days. The first 600 days are the hardest and the most challenging for the trusted strategic advisor. Get your new CEO a countdown clock and make it prominent and visible in their office. As the time to his or her exit is counted down, a productive sense of urgency will permeate every meeting, conversation, and decision.

The one thing almost all CEOs will tell you once they get the job, even some with extraordinary experience, is that when they walk in their new office for the first time, close the door, look out the window, the first question they ask themselves is, “Now what do I do?” Have answers ready.

In a future post, I’ll talk about how the trusted strategic advisor helps the new CEO structure those first 300-to-600 days. It’s a fascinating strategic opportunity and one in which the advisor can have extraordinary influence.

50,000 Feet: Restoring Confidence

jel@e911.com (Jim Lukaszewski) — Fri, 09 Jan 2009 13:57:00 +0000

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:

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.
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.
The reality of regulation is that those who make the regulations end up profiting from them.
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.
Business leaders with integrity begin to step forward and raise their voices in support of better behavior.

All Bias, All Bull, All Spin, All the Time

jel@e911.com (Jim Lukaszewski) — Wed, 07 Jan 2009 19:29:00 +0000

The news media continues its addiction to gutting candidates for public office. Its new targets being Caroline Kennedy, and former Illinois Attorney General Roland Burris, picked to replace Senator Barack Obama. The gutting began during the 2008 presidential campaign, and focused mainly on Sarah Palin and Hillary Clinton.

You can always tell when the gutting begins; it involves continuously demeaning, silly, mean-spirited, vacuous observations, and stories. With Hillary it was the crackle analysis. Sarah Palin was just too easy a target. The media got her ridiculed and then beat her to death with stories about her being ridiculed. With Caroline Kennedy we have the growing “you know” analysis. This “you know” nonsense was started by Bill O’Reilly on Fox News where the spin begins. Several news organizations are now analyzing transcripts of her conversations and interviews to count the number of “you knows” she said. One of CNN’s bright-eyed, ubiquitous female commentators recently gleefully held up a transcript document with all of Ms. Kennedy’s “you knows” highlighted in bright yellow. Who gets the blame if Ms. Kennedy is not appointed? Why, Ms. Kennedy, of course. “She brought it on herself.” That is the set up here.

This is bias. This is bull. None of this matters.

Is this a crisis management problem for Ms. Kennedy? It depends on how much she wants to become a United States senator. It’s situation normal for new media and legacy media bloviators, bellyachers, and bullies.

I have some suggestions for what we should be talking about or doing:

1. How about how we throw a bunch of these criminal executives in jail for having stolen the life’s work of millions and millions of people?

2. How about how we put Bernard L. Madoff, who is living high on the hog, under house arrest in his 55,000 square-foot Manhattan apartment, in Rikers Island with other criminals? Or conversely, how about we put 50 or 60 of Rikers’ prisoners with Mr. Madoff in his apartment.

3. Let’s establish the FBBSAT (the Federal Bureau of Bailout Scrutiny, Analysis and Transparency). This agency would explore and expose where all of the billions of dollars are going and how much is being wasted, used for personal gain or, let’s hope, for what is was intended.

Heard any great bull lately? I would be happy to include in my next round up to chat about, argue, or discuss, as you prefer.

Why on Earth Would Anyone Start Yet Another Blog, Considering the World Has 130 Million Blogs Already?

jel@e911.com (Jim Lukaszewski) — Fri, 02 Jan 2009 21:36:00 +0000

I guess, like anyone else, I’m interested in sharing views based on a lifetime of work and experiences. Over the years, I’ve gotten to look behind many curtains, locked doors, and barricades, most of which you would find boring, banal, and surprisingly dull. However, the benefit of access is understanding, insight, and special knowledge. All of these I intend to provide to the various topics this blog will cover throughout its life.

As we progress down this road, I’ll be establishing some specific departments or concept areas where my comments will be archived, but easily accessible. And, with any luck, we will rattle a few cages, offer some unorthodox and unconventional opinions and thinking, and occasionally be wildly inconsistent.

This is a blog for the curious, the strategic, the articulate, and the argumentative looking for sensible, interesting, constructive discussions.

Here goes.