This piece is part of a leadership roundtable on Rupert Murdoch’s handling of the News Corp. scandal — with opinion pieces by Tuck School of Business Professor Paul A. Argenti, London Business School Dean Sir Andrew Likierman, and Harvard Kennedy School Professor Marty Linsky.
Imagine for a moment that James Murdoch (it’s important for him to be the protagonist here), came forward a few months ago and said that News Corp. had conducted an internal investigation with a strong outside group of esteemed citizens. They found that some reporters were hacking phones and that this had been condoned by managers like Rebekah Brooks, who was being let go immediately. Imagine he said all the right things about how awful such behavior is and talked about a new approach as he begins to take over the company for his father, Rupert.
Quite the different story.
By now, everyone knows that Rupert and James Murdoch, as well as the entire senior management team at News Corp., did just about everything wrong from a crisis communication perspective. They did not get control of the story early enough to shape its destiny. They did not show the requisite amount of remorse and provide the necessary amount of transparency. And, perhaps most important of all, they seemed—like BP, Toyota and Tiger Woods did last year—woefully unprepared to handle a crisis of this magnitude. As a result, they are now playing catch-up with both the U.K. and U.S. governments as well as media outlets, which have probably been waiting a long time for this moment.
What may be less apparent to the untrained eye is why this crisis and so many others seem to unfold to the rhythm of each incessant drumbeat that follows the release of such salacious news, rather than with the composure of my imaginary example. Two reasons: lawyers and human nature.
“First…Let’s kill all the lawyers.”
While this line from Shakespeare probably goes a bit too far, when bad things happen, leaders would do well to take lawyers off a pedestal and put them on the same stepstool that communications professionals and other mere mortals inhabit. Lawyers can tell the Murdochs what might happen in a court of law, but they usually have little idea or care about what will happen in the court of public opinion when a crisis hits. Most of the value in organizations is locked up in intangible assets like reputation, which is what’s at stake if leaders refuse to be as transparent and honorable as they should be.
This is what we’re witnessing with News Corp. Lawyers clearly prepped the Murdochs for their testimony before Parliament, and they surely are behind the scenes advising father and son to say as little as possible. There are real examples, though, of when it works to put the sanctity of reputation above the extreme caution to avoid litigation. Consider the recent case of a priest who was recently advised by lawyers from his insurance company to admit nothing in relation to charges of child molestation he knew had happened at his church. He refused their advice, and won praise from the congregation as well as the media’s front pages.
Yet even if leaders heed my advice and give lawyers no more weight than communications professionals when a crisis hits, they’ll likely still find themselves acting less authentically for another reason: human nature. The way our brains are wired tends to allow us to believe in a rosy future where we are all immortal and can get away with murder (or at least cheating), and where the story always has a happy Hollywood ending. In the real world, however, you will probably die if you smoke too much, you are likely to get caught if you cheat on your spouse, and the story sometimes ends up as a Tiger Woods-esque media circus.
The buffer? Work on crises before rather than after they happen and prepare for all kinds of reputational risk, from misdeeds in far-flung business units to hard-charging executives who sometimes go too far in trying to enhance value for themselves and shareholders.
McDonalds got rid of smoking in its restaurants ten years before any laws changed related to smoking in public. Imagine if the Murdochs exercised similar foresight about the outcry that is now shaking their organization. Cue our opening scenario. My guess is James would have had a much better future as a leader, and News Corp. would not have lost a considerable chunk of its value for its shareholders and other stakeholders. That’s the kind of leadership we need in a world where bad things happen all the time.
Paul A. Argenti is a professor of corporate communication at the Tuck School of Business at Dartmouth and, most recently, author of Digital Strategies for Powerful Corporate Communications.