Three lessons in bad news management from the HP mess.
The Hewlett-Packard scandal underscores three tried-and-true lessons in managing sensitive, complex bad news situations:
1. The response to a crisis often becomes the bigger crisis.
Let’s assume that HP’s board of directors was right to want to find out who among them was secretly talking to the press. But in hiring investigators that used identity theft to obtain private phone records, HP used a hydrogen bomb to kill a skunk.
As happens so many times as to be predictable, the company’s actions and subsequent rationalizations vaporized leadership’s credibility. The fallout on the company’s reputation will last for years.
2. The more that senior PR people play devil’s advocates in advance, the less they’ll have to do damage control after the fact.
HP’s internal investigation was given legal cover by some very accomplished attorneys. But the company should have had at the table a senior PR advisor with equal status to gut-check the inevitable scenario: “How will all this be represented to and interpreted by the public?”
Even some of the most talented in-house and outside attorneys make bad PR advisors. They see the world through precedents and precise subtleties that give “this” a different meaning than “that.” They don’t grasp the crazy, market-driven dynamics by which corporate scandal creates news and news creates corporate scandal. They underestimate the transparency, agendas and speed of the information economy.
It’s these things that make companies like HP look like a deer in the headlights when public reaction to their actions turns ugly.
3. Unhappy insiders are happy to talk to outsiders.
After resigning in disgust, board member and renowned venture capitalist Tom Perkins sent an email to every other director criticizing the internal investigation. The board never responded, and Perkins took his story to the media. His attorney,
As Fortune editor Justin Fox wrote, “If you get into a boardroom battle with the author of a novel titled Sex and the Single Zillionaire, don’t expect him to keep quiet.”
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