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August 22, 2010 9:55pm
Posted in: Posts

The Sunday Business section in the New York Times has an incredible, detailed article that neatly lays out what not to do in the face of a business crisis. Reporter Peter S. Goodman makes a lacerating case against BP’s dreadful response to the Gulf oil disaster, Toyota’s tentative apologies amid a mass recall, and Goldman Sachs’s defiant admission that it had bet against its customers in the months leading up to the financial collapse of late 2008. The article frames the problem as being poorly practiced public relations, but we think it instead emphasizes how difficult it is to conduct good PR when the underlying story is an unpleasant one.

It would be hard to find a collection of executives who possess less evidence of empathy for the people affected by their companies’ decision-making. Tony Hayward of BP, for example, made headlines by proclaiming that “I want my life back” while over-seeing the clean-up following the explosion of one of his company’s oil rigs in the Gulf of Mexico — a message that landed with a thud in the face of his many employees who had actually lost their lives. Akio Toyoda of Toyota, meanwhile, made a tone-deaf appearance in Congress during which he apologized for some quality problems with his company’s cars but refused to acknowledge the extent of the mistake. And, of course, there was Lloyd Blankfein of Goldman Sachs, who dubbed banking “God’s work” shortly after a meltdown that showed the wages of greed.

How can any leader behave in such a publicly out-of-touch manner? Each of these leaders has acted in a fashion that seems to demonstrate that they have no idea how to make right the wrong that they have done, and, worse, none of them seems to have any notion of why anyone is angry with them in the first place. How to avoid such a problem in your own business? For one, it helps to not actually do harm, as the preponderance of evidence suggests these companies did. But secondly, the simplest way to stay on a true path and make business about generating positive social impact is to know, respect, and understand the people you serve.

Familiarity doesn’t breed contempt. It fosters respect. We would all do well to remember that.

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