Reversal at Maryland
The University of Maryland has reversed its position on keeping football coach DJ Durkin. At first, Durkin was reinstated after a damning report about player abuse which resulted in the death of a student, Jordan McNair. Critics say the University’s Board of Regents overstepped in disallowing Loh to terminate the coach.
Now, pressure from students, players, the McNair family, and politicians left the University with no choice but to fire Coach Durkin. In a letter, President Loh explained the decision, including his previous concerns about Durkin’s return.
McNair’s father made a statement, including a message to President Loh when asked:
“The same thing I’ve always said to Dr. Loh. I’ve always commended Dr. Loh for having a level of integrity and doing the right thing even since he first initially came to the hospital, and secondly, when he came to us as a family to apologize and to take full moral and legal responsible for the tragic events that happened.”
In the meantime, Maryland players were involved in an altercation. It seems as though this situation has divided the team as well.
UPDATE: James T. Brady, chairman of the University System of Maryland’s Board of Regents, resigned last week, and President Loh is winning back his power. A Chronicle article notes that Loh won the “battle waged in the court of public opinion,” and whether he will leave the University as planned is now unclear. In a statement, Brady explained his decision and, using the word “proud” three times, cites board accomplishments during his tenure.
Discussion:
How is this situation an issue of integrity?
The regents had planned to terminate President Loh. Should they reverse this position too?
What should the University do now to repair its image?
We have heard nothing that I found from the regents (except their confidence in Coach Durkin). Should they communicate something now? What could they say that could help instead of hurt the situation?
Tesla Investigated for Fraud
Tesla is facing a new challenge this week: a U.S. Federal Bureau of Investigation (FBI) criminal probe into whether the company misstated production data and therefore misled investors. The investigation will focus on Model 3 sedans.
A Wall Street Journal article explains part of the issue. CEO Elon Musk tweeted on July 2, 2017, “Looks like we can reach 20,000 Model 3 cars per month in Dec.“ But reports at the time showed a less optimistic picture. The result was only 2,700 cars produced for the entire year.
A spokesperson said the FBI document requests were voluntary and defended the company:
“When we started the Model 3 production ramp, we were transparent about how difficult it would be, openly explaining that we would only be able to go as fast as our least lucky or least successful supplier, and that we were entering ‘production hell.’ Ultimately, given difficulties that we did not foresee in this first-of-its-kind production ramp, it took us six months longer than we expected to meet our 5,000 unit per week guidance. Tesla’s philosophy has always been to set truthful targets –- not sandbagged targets that we would definitely exceed and not unrealistic targets that we could never meet. While Tesla gets criticized when it is delayed in reaching a goal, it should not be forgotten that Tesla has achieved many goals that were doubted by most. We are enormously proud of the efforts of the whole company in making it through this difficult ramp and getting us to volume production.”
Discussion:
What’s your view of Musk’s statement compared to the result: arrogance, entrepreneurial optimism, or something else?
How well does the Tesla spokesperson address the investigation? What else, if anything, should the company say at this point?
In what ways does the company demonstrate a lack of vulnerability in this situation?
Google Admits Sexual Harassment Incidents
It’s been quiet until now, but Google has fired 48 employees for sexual harassment. A New York Times article exposed a number of high-profile departures dating back to 2014, including Andy Rubin, who developed the Android.
Rubin was paid $90 million when the company asked for his resignation, but executives never told the entire truth: that Rubin left because he was accused of sexual misconduct. Instead, then-CEO Larry Page, complimented him: “I want to wish Andy all the best with what’s next,” and “With Android, he created something truly remarkable—with a billion-plus happy users.” Rubin denies the claim and the circumstances of his termination.
In addition to this situation, the Times article cites a number of relationships between senior-level managers and employees. An email from CEO Sundar Pichai and the VP of people operations to staff acknowledges the 48 departures, including 13 “senior managers and above.”
Hi everyone,
Today's story in the New York Times was difficult to read.
We are dead serious about making sure we provide a safe and inclusive workplace. We want to assure you that we review every single complaint about sexual harassment or inappropriate conduct, we investigate and we take action.
In recent years, we've made a number of changes, including taking an increasingly hard line on inappropriate conduct by people in positions of authority: in the last two years, 48 people have been terminated for sexual harassment, including 13 who were senior managers and above. None of these individuals received an exit package.
In 2015, we launched Respect@ and our annual Internal Investigations Report to provide transparency about these types of investigations at Google. Because we know that reporting harassment can be traumatic, we provide confidential channels to share any inappropriate behavior you experience or see. We support and respect those who have spoken out. You can find many ways to do this at go/saysomething. You can make a report anonymously if you wish.
We've also updated our policy to require all VPs and SVPs to disclose any relationship with a co-worker regardless of reporting line or presence of conflict.
We are committed to ensuring that Google is a workplace where you can feel safe to do your best work, and where there are serious consequences for anyone who behaves inappropriately.
Sundar and Eileen
Discussion:
Should Google have been more transparent about the previous departures? Why or why not?
Should the executives say more in the email about the specific departures mentioned in the Times article? Why or why not?
Assess the email for audience analysis, objectives, tone, organization, and style. What works well, and what could be improved?
Which leadership character dimensions does Pichai demonstrate and fail to demonstrate?
Facebook's War on "Fake News"
Facebook has taken several steps to banish incorrect information on the site. The company provides three examples of questionable news items and the action they took, including what they missed.
In some of these situations, stories were doctored with images from related situations. One image, with the caption, “Man from Saudi spits in the face of the poor receptionist at a Hospital in London then attacks other staff,” represents a situation that happened at a veterinary hospital. The post explains, “On Facebook, we’ve seen years-old images of violent acts, protests and war zones reposted and used to inflame current racial or ethnic tensions.”
Another story promised that NASA would pay people $100,000 “to stay in bed for 60 days.” Although this may sound appealing—and it did garner millions of Facebook views—again, this claim referred to an older article in which a journalist was paid $18,000 for staying in bed for 70 days. But the offer no longer stands.
A Standard study reports that Facebook’s efforts are working to reduce misinformation, although we don’t yet see the same effects on Twitter: “Interactions then fell sharply on Facebook while they continued to rise on Twitter.“ A Mashable report explains:
“Mark Zuckerberg and company may be on the right track when it comes to fighting fake news, but as you can see from those engagement numbers, it’s not a success story quite yet. Even with the downward trend over the past 2 years, Facebook is still responsible for much more of the spread of fake news than a social platform like Twitter.”
Discussion:
How do you interpret Facebook’s progress?
Assess the Facebook post. How well is the company taking responsibility and explaining what still needs to be done?
Facebook's Messaging Over Time
The Wall Street Journal reports how Facebook has repositioned itself since its founding in 2004.
In 2005, at Harvard, founder Mark Zuckerberg said Facebook’s purpose is to ”look people up” and for “connecting to people.” In 2008, Facebooke expands and messages focus on helping people “share information. . . and share parts of their identity with each other.” In 2010, Zuckerberg’s vision enlarged: “People can have instantly social and personalized experiences everywhere that they go.” Soon after, Zuckerberg focused on problem solving.
In 2012, Zuckerberg said, “Our mission isn’t to be a public company. Our mission is to make the world more open and connected.” By 2013, Zuckerberg was seeing Facebook’s role in selecting governments, getting healthcare access—improving people’s lives.
More recently, given concerns about privacy and misinformation, Zuckerberg’s messages focus on responsibility.
Discussion:
The WSJ video has a negative connotation about Facebook’s changing message, particularly in light of today’s news about shareholder proposals to split Zuckerberg’s roles. Do you agree with this assessment?
How well has Zuckerberg handled messages about the evolution of Facebook in the past 14 years? What, if anything, can he do differently now?
Do you agree with the proposal to split the CEO and chairman jobs? In other words, does Zuckerberg have too power? Does he need help at this point?
How is Facebook’s evolving messaging a potential matter of integrity?
Senators Send Harsh Letter to Google
The U.S. Committee on Commerce, Science, and Transportation sent a strongly worded letter to Google CEO Sundar Pichai. The senators question what the company has done to protect 500,00 users whose profile information was stolen in 2015. Their anger stems from knowledge of an internal memo, cited in a Wall Street Journal article, discouraging disclosure because of fear of “immediate regulatory interest” and the requirement for Pichai to testify before Congress.
In the letter, the senators compare Google’s response to Facebook’s in light of the Cambridge Analytica breach:
“At the same time that Facebook was learning the important lesson that tech firms must be forthright with the public about privacy issues, Google apparently elected to withhold information about a relevant vulnerability for fear of public scrutiny.”
The senators then list specific information about vulnerabilities for Google to provide by October 30.
Discussion:
Read the Wall Street Journal article for more background information. Did the senators respond appropriately? Why or why not?
What is Google’s accountability in this situation? What is the committee’s accountability?
In addition to responding to the senators’ requests, what, if anything, should Google communicate to the public at this point?
Google may have been avoiding its own vulnerability.
Amazon Loses Favor After Announcing $15 Wage
Amazon received good press for announcing employees would earn a minimum of $15/hour. But today’s news tells a different story.
Although the hourly wage will increase, Amazon is cutting bonuses and stock options, and employees fear it will cost them thousands of dollars in total compensation. The stock options, according to employees’ online posts, gave them a sense of company ownership. Some proposed walking out on Black Friday, the biggest shopping day of the year. Amazon had also granted bonuses for attendance and productivity, called Variable Compensation Plan, or V.C.P.
In response, company leaders said they would look at employees’ total compensation to make sure no one would be worse off after the changes. A spokesperson also released this statement:
"The significant increase in hourly cash wages more than compensates for the phase out of incentive pay and [restrictive stock units]. We can confirm that all hourly Operations and Customer Service employees will see an increase in their total compensation as a result of this announcement. In addition, because it's no longer incentive-based, the compensation will be more immediate and predictable."
Box image source. Cart image source.
Discussion:
This is quite possibly a miscommunication or, more to the point, poor communication from Amazon officials to employees. How could the company have done a better job?
How well does the statement address the criticism? What else should the company communicate at this point?
How is this an issue of integrity for the company?
Crisis at Sloan Kettering
Memorial Sloan Kettering (MSK) Cancer Center’s chief executive, Craig Thompson, has resigned from two boards, Merck and Charles River Laboratories, following investigations of conflicts of interest. Thompson issued a statement about his decision to resign:
“I have taken feedback from our staff and faculty seriously and intend to lead by example. I believe this is the right decision for Memorial Sloan Kettering and will allow me to redouble my focus on MSK priorities: quality patient care, faculty, scientists and staff.”
Sloan Kettering’s chief medical officer, Jose Baselga, was accused of not reporting millions of dollars he received from pharmaceutical companies for his research articles. Baselga previously resigned from Memorial Sloan Kettering as well as Bristol-Myers Squibb, where he served on the board. As one former patient wrote, failing to disclose payments gives “the appearance of influence is troubling. It highlights ineffective oversight, with the potential to cast a shadow on the center’s other excellent doctors.”
When the story first broke, Memorial Sloan Kettering leadership wrote a letter stating, “MSK and our faculty need to do a better job.”
Discussion:
Analyze the MSK letter. Who is the audience, and what are the communication objectives? How do you assess the organization and writing style?
Should Thompson also resign his chief executive position at MSK? Why or why not?
How well does MSK leadership take responsibility for the problems? How is this an issue of integrity for MSK?
Amazon Increases Pay to $15/Hour
Starting November 1, Amazon will pay 250,000 and 100,000 seasonal workers at least $15 an hour. A blog post quoted CEO Jeff Bezos:
“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead. We’re excited about this change and encourage our competitors and other large employers to join us.”
The post include a video, “Amazon associates react to $15 minimum wage announcement”:
The company also they would work to increase the federal minimum wage, which, as an Amazon SVP says, could improve from the “current rate $7.25 [which] was set nearly a decade ago,”
One analyst predicted that, after taxes, Amazon’s operating profit will take a hit of 1 of 2%. But the move is being well received. For example, Senator Bernie Sanders, a former critic, complimented the decision:
“What Mr. Bezos has done today is not only enormously important for Amazon’s hundreds of thousands of employees, it could well be a shot heard around the world. I urge corporate leaders around the country to follow Mr. Bezos’s lead.”
Discussion:
Assess Amazon’s blog post and video. How well does the company use the news to improve the company’s image?
What’s your view of the move: the right thing to do, a bad financial decision, or something else?
British Rail Company Apologies
Great Western Railway is tripping over itself apologizing for thousands of canceled and late trains. Apologies by British train organizations are so common that a web designer created a site, https://www.sorryfortheinconvenience.co.uk, to chronicle statements, now totaling more than 420,000.
A look at the railway’s Twitter feed shows two failures but no apology. Maybe the organization is catching on: over-apologizing isn’t a good strategy. At some point, customers just want problems fixed.
Discussion:
How can a leader know when the organization is apologizing too much?
Take a look at the GWR Twitter feed. How would you advise the organization to improve its communications?
What leadership character dimensions is GWR demonstrating and failing to demonstrate with its apologies?
WhatsApp Message Causes Dramatic Infibeam Stock Price Drop
Infibeam, an India e-commerce company, lost more than 70% of its stock value after a WhatsApp message questioned the company’s governance. The message was reported to be sent by an analyst at Equirus Securities months ago, but it only recently surfaced and went viral. Equirus denies involvement.
An India Times article explains the message:
“The note said the company gave an interest-free and unsecured loan to a subsidiary with negative net assets to be repaid over eight years. The note also mentioned that the company has re-classified its co-founder, who continues to hold a large chunk of shares, as non-promoter.”
An Infibeam spokesperson responded to the controversy:
“The company has given interest-free unsecured loans to its wholly owned subsidiary NSI Infinium Global since inception. These loans are short-term loans which are repayable on demand and have been utilised by NSI solely for its business and operations. Further, there has been no change in the promoters from the list of promoters identified and disclosed by the company info in the offer documents for its IPO.”
Discussion:
How can people do a better job at distinguishing between real reports and rumors?
How well did Infibeam respond to the news? What effect do you expect on the company stock on Monday?
Facebook Breach Announced Today
Millions of Facebook users inadvertently gave hackers access to their accounts, and the company is trying to fix the problem. Hackers found a way in through the “View As” feature, which people use to see how their profile looks to others.
The company learned of the issue this week and today held a conference call with reporters. To the extent to which Facebook could manage the story, it’s the perfect day for such a report, when the country is focused on whether lawmakers will support Brett Kavanaugh’s nomination to the Supreme Court despite allegations of sexual assault.
On the conference call, CEO Mark Zuckerberg stressed that fighting hackers is an ongoing concern:
"This is a really serious security issue. This underscores there are just constant attacks from people who are trying to take over accounts and steal information from our community. This is going to be an ongoing effort."
Facebook’s VP of product development posted a “Security Update” statement on Facebook’s news site, including this reassurance:
“People’s privacy and security is incredibly important, and we’re sorry this happened. It’s why we’ve taken immediate action to secure these accounts and let users know what happened.”
Cover image source. Spotlight image source.
Discussion:
Do you agree that Facebook timed the announcement when a bigger story would likely overshadow the news? Or am I just cynical?
Assess the Security Update as a persuasive message. Describe the tone and organizational strategy. How well does the statement achieve its objectives?
How well does the company take responsibility for what happened?
Serena Williams Controversy
Serena Williams lost the U.S. Open women’s final tennis match and criticized umpire Carlos Ramos. A Washington Post article delves into “whether sexism, conscious or not, skews the playing field.”
The writer offers the following evidence:
Ramos still has support from the International Tennis Federation.
London Telegraph published data showing that, for the past 20 years, men received code violation fines almost three times as often as women. The writer acknowledges that men’s games are longer, but she says this doesn’t account for the entire difference.
An Australian newspaper criticized for what some consider a racist image of Williams boldly republished it on the cover with the headline, “Welcome to the PC World.”
The writer offers more evidence on both sides of the issue and suggests changes within the association.
Discussion:
Read more about the situation if you are unfamiliar. What could Williams and Ramos each have done differently?
What’s your view overall? Was Williams treated unfairly? Did she react appropriately?
How do you assess Williams’ response after the incident? How well did she recover from the so-called “outburst”?
What leadership character dimensions are illustrated by this situation?
JD.com CEO Arrested for Sexual Misconduct
Richard Liu, founder and CEO of Chinese e-commerce company JD.com, was arrested in Minneapolis for sexual misconduct. Because of his high profile and billionaire status, Liu’s arrest was the most popular topic of conversation on social media in China last week.
Two people describe a case involving a student at the University of Minnesota, part of a joint doctoral program in business administration with Tsinghua University. Liu was released without bail and has returned to China. He denies any wrongdoing, and JD.com posted a statement in Chinese, translated by a student:
Sunday, Sep. 2, 2018
We have noticed that there are rumors and false accusations about Mr. Qiangdong Liu on Weibo (Chinese social media site, similar to Twitter) recently. We hereby declare as follows: Liu was falsely accused while in the US on a business trip, but the police investigators found no misconduct and that he would continue his journey as planned. The company will take necessary legal action against false reporting or rumors.
Monday, Sep. 3, 2018
So far as we know, Mr. Liu was arrested on Aug. 31, 2018 in Minneapolis for investigation. He was released from custody shortly. There was no accusation or bail required for the release. Mr. Liu has returned to China and will resume his business activities as originally planned.
In addition to the stock price drop and embarrassment this causes Liu and JD.com, the company may have a governance problem. Liu is required to attend board meetings in person (although he may be able to join via video or telephone). Without him, as an 80% voting rights owner, the board may be unable to make decisions for the business.
A New York Times article focuses on China’s fascination with self-made billionaires as celebrities. Online discussions featured photos of Jack Ma laughing at Liu’s trouble.
Discussion:
I don’t see a statement or press release from Liu or from the company in English. Should Liu or the company publish something at this point on the website? Why or why not?
What should the company do now to manage through this crisis?
How does the Chinese reaction compare to situations in the United States? Can you think of a similar situation when Americans were fascinated by a leader’s hardship?
Changes at Riot Games
Following allegations of sexism, Riot Games has apologized and is making changes. A long report by Kotaku placed blame mostly on the fast company growth and sexist working environment.
Trying to shed its “bro-culture” stigma, leaders have acknowledged that the company could be more inclusive. In a long statement last month titled, “Our First Steps Forward,” the company starts by apologizing to “to all those we’ve let down.” The statement then lists steps the company will take around inclusion initiatives, staffing, training, and so on
In a more recent statement, the company announced hiring a “leadership and strategy expert,” Frances Frei, who had also worked with Uber. The statement includes this quotation from Frei:
“After spending time with Riot’s leadership and many others across the organization, it became clear that Riot is truly putting everything on the table and committing to evolving its culture. In my interactions with Rioters, I’ve seen extraordinary levels of engagement on these issues across the company. Every Rioter with whom I’ve met truly cares about inclusion, which means real change is possible. Riot isn’t interested simply in fixing problems on the surface, it has the ambition to be an industry leader and to provide a roadmap for others to follow. I share that ambition and am eager to help Riot navigate this process.”
Discussion:
Read Kotaku’s report. How credible do you find the investigation and reporting? What could increase the credibility?
Assess Riot Games’ statement. Who is the audience and what are the communication objectives? How do the organization, writing style, and tone affect your assessment?
Now assess the statement about Frei. What’s your view of including Frei’s statement? What else, if anything, should be included in the statement?
Overall, how well is Riot Games demonstrating accountability? What other leadership character dimensions are demonstrated?
Twitter Denies Shadow Banning
"Shadow Banning" was a big topic at yesterday's Senate Intelligence Committee hearings with Facebook and Twitter. Twitter CEO Jack Dorsey denied the claim that tweets are suppressed based on political ideology. But he did admit that candidates' tweets were affected in search results.
In a blog post, Twitter executives explained the definition of shadow banning and denied the practice. The post also explains how search results are ranked:
- Tweets from people you’re interested in should be ranked highly
- Tweets that are popular are likely to be interesting and should be higher ranked
- Tweets from bad-faith actors who intend to manipulate or divide the conversation should be ranked lower
The executives confirm a technical issue that prevented Republican politicians tweets from showing up in searches, but they write, "some Democratic politicians were not properly showing up within search auto-suggestions as result of this issue." Like Dorsey, they don't specify numbers affected on each side.
Discussion:
- Assess Dorsey's response to Representative Joe Barton's questions. How well did he respond? How do you assess his delivery skills?
- How well does Twitter take responsibility in the blog post?
- How well does the blog post explain the situation and defend the search results?
Archbishop Calls for Pope's Resignation
As more allegations of sexual abuse within the Catholic church become known, the most senior levels of the organization are facing new challenges. Last week, Pope Francis wrote a letter chastising abusers and calling on the Church to do better. Today, a former senior Vatican, who was an ambassador to the U.S., accused the pope of knowing about and covering up abuse cases since 2013. He is calling on the pope to resign.
The situation involves Archbishop McCarrick, who resigned as cardinal in July. McCarrick is accused of sexually abusing seminarians, and the Pope is accused of "rehabilitating" him rather than disciplining him and removing him from his position.
Archbishop Carlo Maria Viganò explains his reasoning in documented "testimony," including this segment:
Image source of Pope Francis and Archbishop McCarrick.
Discussion:
- Should the pope resign? Why or why not? How does this situation compare to corporate examples? Consider the hierarchy and relationships.
- In what ways is this situation a matter of integrity?
- Viganò uses the word parrhesia. What does this mean, and how does this relate to business communication?
- Which other leadership character dimensions are illustrated by this situation?
Ohio Football Coach: Another Case of Deleted Messages
Ohio State football coach Urban Meyer will forgo pay and the ability to coach three games because of his failure to appropriately handle a staff member's misconduct. A New York Times article chronicles issues with Zach Smith's behavior, including paying $600 at a strip club during a recruiting event, a domestic violence charge, and an affair with a staff member.
During a press conference, Meyer apologized, saying, "I should have done more, and I am sorry for that," and "I followed my heart and not my head."
The Times article also describes a conversation between Meyer and Smith about deleting text messages. I should count the number of stories on this blog since 2010 illustrating that deleting texts and emails fail to get the desired result. These messages are almost always recoverable, and the act of deletion makes the accused look even more guilty.
In addition, in this situation, Ohio State officials at first failed to produce messages requested by the school newspaper. Worse, several staff knew about the request, but no one even approached Coach Meyer to retrieve them.
Discussion:
- Once again, where are the many places deleted messages may be stored? How else can they be retrieved?
- What's your view of the strip club visits? Could Meyer reasonably argue that this is just part of the recruiting process? After all, no students were invited—only university and high school coaches.
- Assess the press conference. How well did university officials, including Meyer, respond to reporters' questions? Did the team appropriately take accountability?
Pope Francis's Letter
Pope Francis has joined the conversation about sexual abuse in the Catholic church after 1,000 victims and 300 perpetrators were identified by a grand jury investigation report in Pennsylvania. The report also revealed how the church systematically covered up the abuse over a 70-year period.
In an open letter, which is posted on Vatican News, expresses empathy early and often, for example, in this passage:
In recent days, a report was made public which detailed the experiences of at least a thousand survivors, victims of sexual abuse, the abuse of power and of conscience at the hands of priests over a period of approximately seventy years. Even though it can be said that most of these cases belong to the past, nonetheless as time goes on we have come to know the pain of many of the victims. We have realized that these wounds never disappear and that they require us forcefully to condemn these atrocities and join forces in uprooting this culture of death; these wounds never go away. The heart-wrenching pain of these victims, which cries out to heaven, was long ignored, kept quiet or silenced.
Pope Francis's letter follows one by Pope Benedict XVI in 2010, when abuse in Ireland became widely known.
Discussion:
- Compare the two letters. In what ways are they similar and different? How might the circumstance and timing affect each approach?
- How is the letter organized? How would you describe the tone?
- Which character dimensions does Pope Francis demonstrate in his letter?
The Debate Over Quarterly Reporting
President Trump is asking the SEC to no longer require report quarterly earnings. Instead, companies would report results every six months.
This may be good news for those who believe that publishing frequent earnings reports encourage a short-term focus. The idea is that investors make rash decisions based on the results from only three months.
One downside of the change could be less transparency. The value of quarterly reports is that investors are more aware of what's happening. In addition, the process itself may be useful internally, as a former investment banker explains:
"What I see from the inside of the quarterly earnings cycle is that there’s actually a lot of discipline in it. That process of having to prepare it, release it, explain it and answer questions has real value.”
Also, not everyone agrees that eliminating the report will foster longer-term thinking. As a compromise, some are proposing that reports are still published, but that specific earnings-per-share guidance information isn't included.
Discussion:
- Describe the importance of transparency in financial reporting. How does this relate to accountability?
- What's your view of the proposal to eliminate quarterly reports? Do you see additional benefits or downsides than what is mentioned here?
- In his tweet, President Trump refers to making "business (jobs) even better." How do you see this as a result of his proposal?