Carlos Ghosn Responds to Charges

The former CEO of Nissan, Carlos Ghosn, who has been arrested four times on charges related to financial misconduct, responded in a video message. The key point: “I’m innocent of all the charges.” Ghosn also claims that accusations are “all biased, taken out of context, twisted.”

Ghosn was a celebrated business executive in Japan. His success in growing Nissan is “incontrovertible,” according to a New York Times podcast. He gained a reputation as a serious cost-cutter ("Le Cost Killer"), a strategy that was questioned at the time but brought about great profits for the company, placing it second in the list of Japanese automakers behind Toyota and ahead of Honda. Ghosn was CEO from 2001 - 2017, when he became chairman. He was then removed from the board in 2018, after his first arrest.

Charges against Ghosn include using company funds for multiple personal residences, hiding about half of his compensation, shifting $16.6 million in person losses to the company, and other accounting issues.

Nissan management responded to Ghosn’s video message:

“The sole cause of this chain of events is the misconduct led by Ghosn and Kelly. Aside from any criminal matters, Nissan's internal investigation has uncovered substantial evidence of blatantly unethical conduct. This resulted in a unanimous board vote to discharge Ghosn and Kelly as chairman and representative director, followed by a shareholder vote to discharge them from the board. Further discoveries related to Ghosn’s misconduct continue to emerge. The company's focus remains on addressing weaknesses in governance that failed to prevent this misconduct.”

Ghosn image source.

Discussion:

  • What persuasive communication strategies does Ghosn demonstrate in his video message?

  • What are the most and least convincing statements?

  • Assess his Ghosn’s delivery skills.

  • Which leadership character dimensions are illustrated by this situation?

Boeing's Apology Dilemma

Boeing CEO 2.PNG

A Yahoo Finance article describes Boeing CEO Dennis Muilenburg’s decision to apologize for the 737 MAX tragedies and speculates that he may open the company up to lawsuits. However, for crisis communication, his apology is the right decision.

After a report found the planes to blame, Muilenburg admitted, “but with the release of the preliminary report of the Ethiopian Flight 302 accident investigation, it is apparent that in both flights, the Maneuvering Characteristics Augmentation System, known as MCAS, activated in response to erroneous angle of attack information." He’s not telling us anything we don’t already know, and Boeing will likely get sued anyway.

He also apologized: “We at Boeing are sorry for the lives lost in the recent 737 accidents and are relentlessly focused on safety to ensure tragedies like this never happen again.” The apology is critical—and too late in my opinion. Research on apologies indicate that they often reduce lawsuits, time to agree on settlements, and settlement pay.

Discussion:

  • Do you agree with the assessment that the CEO did the right thing by apologizing?

  • How does this situation illustrate vulnerability as a positive leadership character dimension?

  • What other character dimensions are illustrated by this situation?

Southwest Faces Customer Service Criticism

SW.PNG

Despite trading on the NY Stock Exchange under “LUV,” Southwest is taking some heat from customers because of the Boeing 737 MAX plane groundings. According to a USA Today report, customers says Southwest didn’t handle rebookings well:

They're peeved about Southwest's handling of passenger rebookings, especially last-minute flight cancellations that leave them with few options. And they're perplexed by Southwest's uncharacteristic lack of flexibility, with affected passengers given two options: take the alternate flight, even if it's days later or to a different airport, or get a refund.

Our first clue about problems came with Southwest’s first statement about the plane groundings. Little guidance was offered for customers to rebook. The first three comments on a Southwest message posted on March 13 illustrate the problem.

A Southwest spokesman said it’s a challenging situation—like a snow storm that lasts for many weeks—and claimed that the airline did everything it could, including offering "massive flexibility'.'

Discussion:

  • Southwest could not have prevented the Boeing 737 MAX disaster, but what about its own customer service situation? What, if anything, could company leaders have done differently?

  • How should Southwest react to customers’ complaints now? I see nothing on its website or blog.

OurBus Handles a Mistake with Humor

OurBus.PNG

OurBus sent an email with a link that wasn’t yet working and quickly corrected the mistake with some fun. The company offered a $7 discount for rides booked on St. Patrick’s Day and corrected the link with the subject line, “Our Bad. That code doesn't quite work yet...”

In the first email, the date is clearly March 17, but the subject line, “It's your lucky day. Our flash sale starts NOW,” is certainly deceiving.

Discussion:

  • Assess the second message from OurBus. How well did the company handle the situation? What changes would you suggest? (Hint: alignment.)

  • Are people still saying “my bad”? Did they intend to play on “OurBus” with “Our bad”? If so, would it have been better to write, “OurBad”?

  • Which leadership character dimensions does this situation illustrate?

Another Boeing Plane Disaster

Boeing CEO.JPG

The same model Boeing plane that crashed in Indonesia last month has crashed on its way to Nairobi. Although U.S. Federal Aviation Administration confirmed that the Boeing 737 MAX Jet is safe, several airlines have grounded the planes. Other groups, such as the Association of Flight Attendants-CWA, have called for an investigation: “While it is important that we not draw conclusions without all of the facts, in the wake of a second accident, regulators, manufacturers and airlines must take steps to address concerns immediately.” American Airlines will continue to fly the planes. A spokesperson for the pilot union said, it is “very early, but we are watching it very, very closely.” Norweigan Air has grounded the planes based on advice from European Aviation Group, and the UK has banned the model from its airspace.

With 40% of the planes out of service, Boeing is taking a financial and public relations hit. In a message to employees, Boeing CEO Dennis Muilenburg wrote, “We are confident in the safety of the 737 MAX and in the work of the men and women who design and build it.” He also wrote, “Since its certification and entry into service, the MAX family has completed hundreds of thousands of flights safely.”

Boeing’s website statement expresses condolences and describes plans for a software enhancement.

Image source.

Discussion:

  • How much evidence is enough to determine whether to ground planes? What is the logical fallacy to be avoided?

  • How well is Boeing handling the communication? Consider both internal and external messages. What are Muilenburg’s challenges at this point?

Alex Trebek Announces Bad News

Alex Trebek, the longtime host of “Jeopardy!” announced that he has pancreatic cancer. Since 1984, Trebek has been almost synonymous with the TV show, and now his Stage 4 diagnosis is casting doubt on the show’s future.

In a video, Trebek, announced the news with optimism and some humor, referencing his three-year contract. Unfortunately, the prognosis for pancreatic cancer is very poor. The ten-year survival rate is only one percent—the lowest rate of any cancer. Steve Jobs died of pancreatic cancer in 2011.

Cancer rates.JPG

Discussion:

  • Assess Trebek’s video announcement. How does he convey the bad news and display emotional appeal?

  • Did he do the right thing by announcing the news himself? Why or why not? How do the show and network benefit, and what are the downsides?

  • What leadership character dimensions does Trebek demonstrate?

  • Assess the cancer survival rate chart. What principles of business communication does the designer follow, and how could it be improved?

Equifax and Marriott CEOs Testify About Security Breaches

U.S. Senators grilled Equifax and Marriott CEOs about data breaches at the companies in the past two years. Equifax CEO Mark Begor responded to questions following a Senate subcommittee report titled, “How Equifax Neglected Cybersecurity and Suffered a Devastating Data Breach.” The report concludes an investigation of the 2017 breach of 143 million customers’ personal data and accuses the company of not prioritizing security, not following its own patching policies, failing to notify the public in a timely manner, and more.

Begor defended the company and blamed the increasing sophistication of hackers:

“These attacks are no longer just a hacker in the basement attempting to penetrate a company’s security perimeter, but instead are carried out by increasingly sophisticated criminal rings or, even more challenging, well-funded nation-state actors or military arms of nation-states.”

But Senators pointed out that credit company competitors Experian and TransUnion have managed to avoid similar attacks.

The Marriott breach affected 83 million guests of Starwood, which Marriott acquired after the breach took place. Compared to the Equifax situation, Marriott got a pass from senators, such as Tom Carper of Delaware, who said, “The data breach announced by Marriott this past November does not appear to have been caused by the same cultural indifference to cybersecurity the record indicates existed at Equifax. Rather, it looks like Marriott inherited this breach from Starwood.”

Marriott has been consistent in blaming Starwood for the issue, wanting to preserve the brand. In his testimony, CEO Arne Sorenson reinforced the company separation:

“We conducted an assessment on integrating the two systems, although this inquiry was legally and practically limited by the fact that until the merger closed, Starwood remained a direct competitor.”

Here is Sorenson interviewed on CNBC:

Discussion:

  • Watch some of the testimony. How well did each CEO handle the Senators’ questions?

  • Assess Sorenson’s appearance on CNBC. What did he do to try to rebuild the company’s image? What persuasive strategies did he use?

  • Review the subcommittee’s report on the Equifax breach. How is the report organized? How would you describe the writing style and tone? What suggestions would you have for the authors to improve readability?

  • From your perspective, what leadership character dimensions do the CEO illustrate or fail to illustrate?

Measles: Evaluating Evidence

The news about a resurgence of measles raises interesting questions about how we evaluate evidence. About a dozen years ago, a small study alarmed parents and caregivers that the measles vaccine may cause autism. Since then, several large-scale studies have debunked that theory, and the article was retracted.

But the damage was done—and it lingers. A few hold-outs still believe the vaccine may be dangerous, and so they do not have their children vaccinated.

Recently, about 100 measles cases have emerged in the U.S., and once again, the evidence is up for evaluation. How are people convinced? What makes people change their minds?

In his book Factfulness, Hans Rosling offers this advice:

[I]f you are skeptical about the measles vaccination, I ask you to do two things. First, make sure you know what it looks like when a child dies from measles. Most children who catch measles recover, but there is still no cure and even with the best modern medicine, one or two in every thousand will die of it. Second, ask yourself, “What kind of evidence would convince me to change my mind?” If the answer is “no evidence could ever change my mind about vaccination,” then you are putting yourself outside evidence-based rationality, outside the very critical thinking that first brought you to this point. In that case, to be consistent in your skepticism about science, next time you have an operation, please ask your surgeon not to bother washing her hands.

Along these lines, a Medium article, The Falsification Mindset, suggests ways for us to change our opinions. The author encourages us to consider what evidence we would need in order to change our minds. This process is particularly useful because we more typically look for reasons to continue believing what we believe—confirmation bias.

Image source.

Discussion:

  • What examples can you identify of when you have experienced confirmation bias. In retrospect, could you have avoided the bias to make a better decision or to have a more accurate view?

  • What’s your view of the measles vaccination? How did you form this opinion? How has it changed over time?

  • Identify a belief. What evidence would you need to think differently?

  • How is humility relevant to this situation?

Open Letter to Amazon

After Amazon’s failed move to Long Island City, Queens, local executives, lawmakers, and others signed an open letter asking Amazon to reconsider. The letter focuses on the benefits NYC would gain from having Amazon, particularly 25,000 new jobs.

Also appearing as a full-page ad in the New York Times, the letter includes some emotional appeal about New Yorkers’ “charm” and acknowledges difficulties in getting community support for the project. Not until the last paragraph do we see a shift from New York to Amazon and how the company would benefit from building in Long Island City.

Open Letter.JPG


Discussion:

  • What principles of persuasion does the letter illustrate?

  • How could the letter be improved?

  • What leadership dimensions are illustrated? Which may be lacking?

HBO CEO Departs

HBO CEO Richard Plepler is leaving the company. His announcement came shortly after HBO’s chair of the board spoke with the WarnerMedia CEO about possibly taking over HBO and Turner.

Here is Plepler’s email to employees:

My dad always gave the best advice. Whenever there was a difficult decision to make, he counseled that since no one could ever have perfect visibility into the future, the best thing you could do was trust your instincts. It has been a touchstone for me throughout my life, and I have found myself returning to it again recently as I think about what is an inflection point in the life of this wonderful company. Hard as it is to think about leaving the company I love, and the people I love in it, it is the right time for me to do so.

In the past weeks, I’ve thought a lot about the incredible journey of this company in the nearly 28 years that I have been blessed to be here. It’s a journey of great pride and accomplishment because so many of you, and many others before us, have made HBO a cultural and business phenomenon. Thanks to all of you, we are today churning on all cylinders both creatively and as a business. Thanks to all of you, I can move on to the next chapter of my life knowing that the best team in the industry remains here to carry on our continued progress and success. As I have said before, this is the team of teams.

It has been the great joy of my professional life to share this ride with you over these many years. And the great honor of my professional life to be your CEO. I don’t have the words to express my gratitude for the support and talent that made our success together possible. But suffice it to say, my love for this place, and for all of you, is deeply a part of me and will last a lifetime. I look forward over the coming weeks to thanking as many of you as I can for the thousands of contributions big and small that have made “this thing of ours,” to quote Tony Soprano, so special. I have told John, who has been nothing but gracious since we spoke, that I would work closely with him to assure a seamless and organic transition.

We’ve created a great and unique enterprise and I know that you will protect its legacy and do all to enhance its future in the years to come.

Know that I will always be cheering loudly, even when I am outside this building, as HBO continues to thrive.

With respect, admiration, and gratitude,
Richard

Image source.

Discussion:

  • Assess Plepler’s email. Who are his primary and secondary audiences? What are his communication objectives?

  • What principles of business communication does Plepler follow, and how could he improve the email?

  • What, if anything, does he give as the reason for his decision? Should he say more about this? Why or why not?

  • What leadership character dimensions are illustrated by his email?

Instacart Tries to Make Things Right

Instacart post.JPG

Criticized for underpaying shoppers, personal grocery delivery company Instacart is changing its compensation model. Personal shoppers were always paid a minimum for orders, but the company had started including tips in that minimum amount. The company admitted to paying only 80 cents in some cases for someone to pick and deliver a batch of groceries. In a petition, personal shoppers claimed that “customers' tips are essentially being paid to Instacart rather than to the workers ourselves.”

In a blog post, Instacart CEO Apoorva Mehta admits “clearly we haven’t always gotten it right.” He announced policy changes to ensure the following:

  • Tips should always be separate from Instacart’s contribution to shopper compensation

  • All batches will have a higher guaranteed compensation floor for shoppers, paid for by Instacart

  • Instacart will retroactively compensate shoppers when tips were included in minimums

Shopper image source.

Discussion:

  • Read Mehta’s entire blog post. What principles of business communication does he follow? What, if anything, can be improved?

  • In what ways does Mehta demonstrate strong leadership character?

  • How could Instacart have avoided this situation, including the negative effects on personal shoppers and the negative publicity?

Amazon Changes NYC Plans


After months of searching for a new headquarters location and deciding on Long Island City, Amazon has changed course and withdrawn the plan. In a blog post, the company explained the decision:

Amazon logo.JPG

After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.

We are disappointed to have reached this conclusion—we love New York, its incomparable dynamism, people, and culture—and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams.

We are deeply grateful to Governor Cuomo, Mayor de Blasio, and their staffs, who so enthusiastically and graciously invited us to build in New York City and supported us during the process. Governor Cuomo and Mayor de Blasio have worked tirelessly on behalf of New Yorkers to encourage local investment and job creation, and we can’t speak positively enough about all their efforts. The steadfast commitment and dedication that these leaders have demonstrated to the communities they represent inspired us from the very beginning and is one of the big reasons our decision was so difficult.

We do not intend to reopen the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.

Thank you again to Governor Cuomo, Mayor de Blasio, and the many other community leaders and residents who welcomed our plans and supported us along the way. We hope to have future chances to collaborate as we continue to build our presence in New York over time.

Amazon claims the new office would have created 25,000 jobs, but NYC lawmakers questioned the subsidies the company would have received. Critics also oppose Amazon’s anti-union stance and cite concerns about how the growth would affect Queens. In the end, officials say Amazon was inflexible; one local politician referred to the company as “a petulant child.”

According to a New York Times article, “Amazon’s decision is a major blow for Gov. Andrew M. Cuomo and Mayor Bill de Blasio, who had set aside their differences to lure the giant tech company to New York.”

Long Island city image source.

Discussion:

  • Analyze Amazon’s statement. How well does the company announce the decision, while maintaining relationships?

  • What else, if anything, should the company say at this point?

  • Should Governor Cuomo or Mayor de Blasio make their own announcements? Why or why not?

Updates on the Virginia Govenor

Election night.jpg

Whether Virginia Governor Ralph Northam resigns just got more complicated. If Northam steps down because of racist photos in his yearbook, the lieutenant governor would replace him. But Justin Fairfax faces his own challenges: a woman accused him of sexual assault.

Fairfax denies the claims and refers to the incident at the 2004 Democratic National Convention in Boston as consensual sex. To complicate matters further, Fairfax has accused Northam’s supporters of a “smear” campaign:

“Does anybody think it’s any coincidence that on the eve of potentially my being elevated that that’s when this uncorroborated smear comes out?”

Fairfax also questioned whether Mayor Levar Stoney of Richmond may have been involved in the accusation to which Stoney responded, “The insinuation is 100 percent not true, and frankly it’s offensive.”

For its part, Eastern Virginia Medical School is investigating how the racist photos got into the 1984 yearbook.

Justin Fairfax image source.

Election night image source.

Discussion:

  • What’s your view of Fairfax’s response?

  • Should a 2004 sexual assault charge prevent Fairfax from replacing Northam?

  • Should the replacement issue drive whether Northam resigns?

  • What is the medical school’s responsibility in this situation?

Governor's Racist Yearbook Images

Virginia State Governor Ralph Northam is facing calls for his resignation when images from his 1984 medical school yearbook surfaced. After Northam was in the news this week for supporting women’s rights to an abortion, a conservative group posted the images on the website Big League Politics.

Northam 2.JPG

Two people appear in one image: one in blackface and the other wearing a KKK outfit. Northam responded to the controversy with this statement:

“I am deeply sorry for the decision I made to appear as I did in this photo and for the hurt that decision caused then and now. This behavior is not in keeping with who I am today and the values I have fought for throughout my career in the military, in medicine, and in public service. But I want to be clear, I understand how this decision shakes Virginians’ faith in that commitment.”

For some, the apology isn’t enough. Several democrats who recently entered the 2020 presidential race have weighed in: Sen. Elizabeth Warren (Mass.), Sen. Kamala D. Harris (Calif.), Sen. Kirsten Gillibrand (N.Y.), Sen. Cory Booker (N.J.), and Julián Castro (former mayor of San Antonio) all called for Northam’s resignation. He has been in office about 13 months.

UPDATE: Governor Northam now says he did not appear in the photo, and he refuses to resign:

Discussion:

  • What do you think Northam thought when he ran for office? Did he not remember the photo, or did he not think it was a big deal, or was he hoping that people wouldn’t find out? You have to wonder.

  • Should Northam have done or said anything in addition to the apology to garner more support? Would it have made a difference in the public response?

  • How do you interpret Northam changing position?

  • Should Northam resign? Why or why not?

McKinsey PPT Slide Causes Problems

Boeing.PNG

Back in 2006, Boeing hired management consultancy McKinsey to help the company launch its 787 Dreamliner despite rising titanium prices. According to a New York Times article, McKinsey evaluated a proposal for Boeing “to mine titanium in India through a foreign partnership financed by an influential Ukrainian oligarch.”

On a PowerPoint slide, the consultancy suggested that Boeing “respect traditional bureaucratic process including use of bribes.” Included on the slide were names of eight “key Indian officials.” As the article notes, “Nowhere in the slide did McKinsey advise that such a scheme would be illegal or unwise.”

McKinsey admitted authoring the report only after learning that the Times had a copy. Details are fuzzy, and McKinsey isn’t offering more explanation.

Discussion:

  • What’s your view of McKinsey’s responsibility in this situation? Do you believe they encouraged illegal activity, were just doing the job of management consultant firm and considering cultural realities, or something else?

  • The PPT slide seems to have implicated McKinsey. Should the consultants have been more careful about what was documented? Why or why not?

  • What character issues may be at play in this situation?

  • The NYT author wrote, “Nowhere in the slide…” I would say, “Nowhere on the slide…” Which is correct—or are both acceptable?

Cheesecake's Failed Promotion

Cheesecake.PNG

To celebrate its 40th anniversary, Cheesecake Factory offered free cheesecake delivery, but stores ran out and deliveries were slow.

Through the app DoorDash, customers ordered a free slice of the cake. The company said 40,000 slices were available, and people who didn’t get their promised piece got angry. Drivers were put in uncomfortable positions, sometimes waiting hours for orders to be ready for delivery. A flight between drivers broke out in Arlington, VA, and one got arrested.

The company responded by expressing gratitude for the tremendous interest and by complimenting themselves for delivering 60,000 slides—but no apology came. DoorDash tweeted, “A huge shoutout to all of the hardworking Dashers who made this exciting day possible! You’re the real MVPs.” A Cheesecake Factory spokesperson said, “Our Day of 40,000 Slices promotion had such a tremendous response from our guests that we extended it and delivered more than 60,000 complimentary slices. We were truly humbled by the popularity of the offer and by how quickly our fans responded as all of the 60,000 complimentary slices were ordered within an hour of the promotion's start time."

Discussion:

  • How could Cheesecake Factory have done a better job planning the promotion?

  • Should the company response be different? Do you think the leaders should apologize? Why or why not? If so, what would be an appropriate apology?



Prep School Criticized for Abuse and False Apps

Landry 2.PNG

College prep school T.M. Landry has garnered national attention for helping Black students get into college, but all has not been well at the school. Students are speaking out about emotional and physical abuse as well as falsified college applications.

According to a New York Times report, examples of physical abuse include “forced to kneel on rice, rocks, or hot concrete for hours” and being “choked, yelled at, and berated.” Students report being told to lie on college applications about classes they took and the conditions under which they grew up, for example, exaggerating their poverty.

The Landrys, a married couple who run the school, defended their actions, saying they push kids to their limits. Mr Landry admits to physical contact, and he said, “Oh, I yell a lot.” Since a 2013 case against him that included probation, Landry says he no longer practices physical punishment. He also denied falsifying students’ applications.

College results have not been great. Students who spent more time at the prep school are more likely to withdraw or transfer to less demanding programs. The New York Times article describes an unaccredited school with little traditional programming, so students may not be academically prepared for the schools that admit them.

Image source.

Discussion:

  • Assess the school website. The opening video features Mr. Landry, and the rest of the site boasts college acceptances. How convincing might families find the way the school is promoted? Other than admitting abuse, should the site say more to give parents and prospective students a more accurate picture of the school philosophy and practice?

  • How is this situation an example of failing integrity? Also consider intent versus impact. What could the founders' intent, and how is that different from the impact? 

Dolce and Gabanna Cancels Show and Apologizes

Italian fashion designer Dolce and Gabanna cancelled a major show scheduled in Shanghai and apologized to the Chinese people for an offensive ad and comments on social media. The ad showed Chinese-French model Estelle Chen, in separate videos, eating pizza and pasta with chopsticks. With stereotypical music in the background, the ads seem to mock the woman and a Chinese pronunciation of the company’s name.

D&G.JPG

After criticism on Weibo, the company made the situation far worse. Co-founder Stefano Gabbana posted negative comments, at right, about China and its people on Instagram, and then denied the comments, claiming his account had been hacked.

Later, Dolce and Gabbana leaders tried to recover by posting a statement on the company’s Instagram account: "We are very sorry for any distress caused by these unauthorized posts. We have nothing but respect for China and the people of China." Another post read, "Our dream was to bring to Shanghai a tribute event dedicated to China which tells our history and vision. It was not simply a fashion show, but something that we created especially with love and passion for China and all the people around the world who loves Dolce & Gabbana.”

They also posted an apology video.

Discussion:

  • What’s your view of the ad series? Can you see how people would think they are offensive? Why or why not?

  • How well did Dolce and Gabanna eventually recover from the incident? Analyze the apology video.

  • Which leadership character dimensions are illustrated by this situation?

Negative Reports About Facebook

Two recent articles cite trouble at Facebook. The first is a New York Times story titled, “Delay, Deny and Deflect: How Facebook’s Leaders Fought Through Crisis.” The report is a damning criticism of how the company, and particularly Mark Zuckerberg and Sheryl Sandberg, handled recent situations:

But as evidence accumulated that Facebook’s power could also be exploited to disrupt elections, broadcast viral propaganda and inspire deadly campaigns of hate around the globe, Mr. Zuckerberg and Ms. Sandberg stumbled. Bent on growth, the pair ignored warning signs and then sought to conceal them from public view. At critical moments over the last three years, they were distracted by personal projects, and passed off security and policy decisions to subordinates, according to current and former executives.

The article accuses the company’s response to Russia’s meddling in U.S. elections, data privacy issues, and hate speech and propaganda. The article describes aggressive lobbying and efforts to conceal Russia’s infiltration of the network.

The second article, a Wall Street Journal report, describes declining employee morale at Facebook. Criticism about the company and the declining stock price are getting difficult for employees to stomach. According to the Journal article, employees are questioning the company’s growth strategy and are concerned by a lack of innovation. Employees are also less optimistic about the company’s future. One year ago, 87% employees said they were optimistic; today, that number is 52%.

The Times article reports that Zuckerberg has been asked whether it’s time for new company leadership, and he has repeatedly said that he will not step aside.

Zuckerberg image source.

Discussion:

  • What’s your view of the situation at Facebook? Is the Times article on target, too harsh, too lenient, or something else?

  • One possibility is that the company is experiencing a natural progression—a growth cycle that most companies experience. What do you think?

  • What are the value and potential downsides of employee surveys?

Nissan Chairman Is Arrested

Nissan’s chairman was arrested for financial misconduct, including under-reporting his income in securities fillings. Carlos Ghosn may have been engaging in improprieties for years.

Nissan.jpg

The news came as a surprise to many. Ghosn is a popular business figure, credited with turning around Nissan, Renault, and Mitsubishi by forming an alliance and directing cost-cutting and layoffs. According to a Wall Street Journal article, the shock is felt particularly at Renault; a union leader described the reaction as “a feeling of stupefaction and a lot of anger.”

The French government has a 15% state in Renault, so President Emmanuel Macron also weighed in: “As a shareholder, the French state will remain extremely vigilant regarding the stability of the alliance.” At this point, officials are still trying to sort out the news and determine leadership going forward.

Nissan CEO Hiroto Saikawa delivered a news statement, translated in English on Bloomberg. The company also issued this matter-of-fact statement.

Nissan image source. Ghosn image source.

Discussion:

  • Why would a successful business executive engage in financial misconduct? What leadership character dimensions are lacking?

  • How does financial impropriety go on for years in a situation like this? Who should be accountable for the misconduct?

  • Assess Saikawa’s news statement. What works well to improve brand image, and what could be improved?