Capital One's Response to the Breach

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A hacker got access to 140,000 Capital One customers’ credit information and social security information, and about 106 million people were affected by other leaked information. Officials arrested Paige A. Thompson, who goes by “erratic” and was a former Seattle technology company software engineer.

In a bar chart, a BBC article puts this breach in context of others. Capital One’s press release describes the company’s quick response:

“Capital One immediately fixed the configuration vulnerability that this individual exploited and promptly began working with federal law enforcement.”

The release also includes a statement from Chairman and CEO Richard Fairbank:

"While I am grateful that the perpetrator has been caught, I am deeply sorry for what has happened. I sincerely apologize for the understandable worry this incident must be causing those affected and I am committed to making it right."

In addition, as expected, the release includes information for customers, offers free credit monitoring, and provides an FAQ.

Image source.

Discussion:

  • Analyze the press release. Consider the audiences, objectives, organization, tone, and so on.

  • How well does Fairbanks demonstrate humility in the press release? What other leadership character dimensions are illustrated? How well does he inspire confidence in Capital One?

  • Analyze the BBC chart shown here. What works well about the chart, and what else would be helpful to understand these breaches in context?

Kim Kardashian West Accused of Cultural Appropriation

Kim Kardashian West named her new line of shapewear Kimono and was accused of cultural appropriation. Kardashian West said the name, which, like her other brands, starts with a “K,” is “a nod to the beauty and detail that goes into a garment.”

A New York Times article describes the controversy over using the name of this traditional Japanese garment:

“But while traditional kimonos, which date from the 16th century, according to the Victoria & Albert Museum, have many associations, those tend not to involve lingerie, Hollywood celebrities or reality TV. Hence, the problem.”

Kardashian West is unapologetic and plans to continue with the line. She said, “I understand and have deep respect for the significance of the kimono in Japanese culture.”

The Times article mentions two other brands that haven’t received the same backlash: Kimono condoms, and Kimono Lash. The author considers whether the Kardashians’ use of social media made them both popular and vulnerable.

Image source.

Discussion:

  • What’s your view of using the kimono name for a lingerie line?

  • Assess Kardashian West’s response: on target, insensitive, or something else?

  • Do you agree with the author’s conclusion about the Kardashian fame? Why or why not?

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Rutgers Chancellor "Berates" Police Officers

The Chronicle reported that Rutgers Chancellor Nancy E. Cantor “apologized for berating campus police officers.” On her way to the airport, Cantor’s driver hit a parked police car. She was detained and said, “If I miss my airplane, you folks are in trouble!” When an officer asked, “I’m sorry, who are you?” she yelled, “I’m the chancellor!”

The episode, which happened in March, was recorded on the officer’s body camera. Part of the debate is about whether Cantor needed to be detained because she entered the vehicle after the driver hit the other car.

Regardless, the video became public, Cantor apologized, and the Rutgers-Newark police chief responded:

“I appreciate Chancellor Cantor taking the time to review the video. I along with the RUPD are appreciative of her kind words and support. The sentiment is extremely appreciated, and we look forward to continuing a positive working relationship with the Rutgers-Newark chancellor’s office.”

Discussion:

  • Watch the video exchange. What’s your view of the chancellor’s behavior with the police officers?

  • Should the officers have done anything differently in this situation? Why or why not?

  • Assess the police chief’s response. How well does he demonstrate forgiveness?




Mets Manager Admits Mistake

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Mets manager Mickey Callaway admitted that an “administrative” error of switching pitchers “probably cost” the team the game. According to reports, the admission was unusual. As one news outlet explained, “His postgame press conferences can get combative, and his unwillingness to admit to any wrongdoing hasn’t played well with the New York media.”

Fans and players seem to be responding positively to the Callaway’s apology. One example is the response from first baseman Pete Alonso:

“Having a manager that’s not straight up and honest, that’s tough to play for a guy like that. But I’m fortunate enough to play for a guy like Mick. I love playing for Mick and all of the other guys love playing for Mick because he’s been honest and straight-up.” 

For years now, corporate stakeholders have expected more humility from leaders. Seeing an example in sports is refreshing.

Image source.

Discussion:

  • What’s your view of Callaway’s admission?

  • Not everyone likes this approach. I haven’t seen the clip, but a friend tells me local sports commentators said they want to see more “leadership.” Is admitting failure not part of demonstrating leadership?

  • What other leadership character dimensions are illustrated by this example?







VW's New Ad

Volkswagen is still trying to rebuild its image after the emissions scandal in 2015. A new advertising campaign tackles the issue directly, beginning with audio news reports from that time. But the focus, described on YouTube, is on the future: “Every negative has a positive. Learn more about our all-electric vehicles and our plans to help make a better tomorrow at vw.com #drivefortomorrow #vw.”

With an emphasis on innovation, the ad is set to Simon and Garfunkel’s classic song, “The Sound of Silence.” Viewers can imagine company engineers during the past few years creating a new line of electric cars— while VW executives said little about the controversy.

The senior VP of marketing for VW of America acknowledged that the ad is risky but explains the rationale:

“[w]ithout mentioning the past...we would never have the credibility or authenticity to move forward with the brand. Through the last three-and-a-half years or so we kind of operated as usual in the consumers [sic] eye. We kept a very consistent message in the marketplace but didn’t really have a powerful point-of-view as a brand.”

Discussion:

  • What’s your view of VW’s new ad campaign? Did the company make the right decision by invoking the scandal?

  • Other companies facing scandals, such as Uber and Wells Fargo, placed large apology ads, but VW didn’t take this approach. Why do you think that may be the case? Compare VW’s strategy to other recent recovery campaigns.

Character Lessons from Bill Buckner

Every obituary about Bill Buckner mentions the former Red Sox baseball player’s fatal error in the 10th inning of “Game 6.” Playing against the Mets during the 1986 World Series, Buckner let a ball go through his legs and lost the championship, which would have been their first since 1918.

In 2008, with tears in his eyes and to a standing ovation, Buckner threw out the first pitch at Fenway Park when the team was honored for winning the World Series in 2007.

How does someone overcome such a mistake? The New York Times reports that fans were gracious, cheering him when he appeared on field in later years. Buckner did say that it’s “the ugly part of sports” that we focus on just one play in an otherwise stellar career:

"I don't think that in society in general that's the way we should operate. What are you teaching kids? Not to try because if you don't succeed then you're going to buried, so don't try?"

Buckner image source.

Discussion:

  • What character lessons can we learn from Buckner’s experience?

  • What mistake have you made and recovered from? What did you learn about yourself in the process?

Boeing's Crisis Response

At a shareholder’s meeting, Boeing CEO Dennis Muilenberg addressed 737 Max safety concerns following two fatal crashes. He started, as predicted, with an apology and sympathy for the “loss of life,” acknowledging the “devastation.” He contrasted these losses with the many Boeing flights that run safely—”roughly every 1.5 seconds.”

Muilenberg didn’t explicitly address issues raised in the past couple of days, particularly a Wall Street Journal article the previous day accusing Boeing of failing to report the safety feature shut-off to airlines (including pilots) and the FAA.

When asked during the Q&A about accountability, Muilenberg spoke mostly about plans going forward. When asked whether he would resign, he talked about his and his employees’ commitment to safety.

At about 9:00 on the video, a reporter asks about whistle-blowers at Boeing, referring to recent reports that employees tried to alert senior management and the Federal Aviation Administration (FAA). Muilenberg says the question is “fair” but doesn’t quite respond to the accountability issue. At about 14:15, a reporter asks, “Can you admit that the design was flawed?” This is after Muilenberg skirts the previous question, blaming a “chain of events.” Still, he would not admit to a design flaw.

And then he ends the news conference, as a reporter shouts, “Sir, 346 died. Can you answer a few questions here about that?” Earlier, another reporter noted that this was the first time they had a chance to meet with him to ask questions.

Discussion:

  • Assess Muilenberg’s delivery skills. What does he do well, and what suggestions would you have for his future news conferences?

  • How well did Muilenberg address reporters’ questions? What, if anything, could he have said differently?

  • What leadership character dimensions are illustrated by this story? How well did Muilenberg demonstrate them?

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?

Fisher-Price Recall

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At first, the company stood by their product, but after 10 infant deaths since 2015, Fisher-Price voluntarily recalled its Rock ‘n Play sleeper. The decision affects 4.7 million products, and the notice is now prominently displayed on the Fisher-Price homepage. When you follow the link, you see the page at right, which lists all “Recall & Safety Alerts.”

The announcement on April 5 points to a Consumer Product Safety Commission (CPSC) alert, which suggests that customers stop using the product for infants more than three months old, when they can turn over and suffocate.

The announcement on April 12 is a full recall, which urges customers to “immediately stop using the product” and return it for a refund.

Discussion:

  • Analyze the communication situation. Who are the primary and secondary audiences of Fisher-Price’s messages? What information do those audiences need? How might they react emotionally? What are the company’s communication objectives?

  • Product recall messages typically follow a particular structure and provide specific content. What do you observe from this message?

  • Should Fisher-Price have issued the recall earlier? Why or why not?

Boeing's Apology Dilemma

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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

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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

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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?

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.

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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?

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.

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Discussion:

  • What principles of persuasion does the letter illustrate?

  • How could the letter be improved?

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

Instacart Tries to Make Things Right

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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?

Jeff Bezos’s Medium Post

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News is swirling about Amazon CEO Jeff Bezos’s long Medium post accusing the National Enquirer of “extortion and blackmail” for pictures of him and a woman other than his wife. Bezos claims that Chairman and CEO David Pecker acts of behalf of President Trump to discredit key people, and he cites an immunity deal between the Enquirer and the justice department for these actions. President Trump has openly criticized Amazon for not paying enough taxes.

A popular story about the piece is how Bezos used the word “complexifier”:

“My ownership of the Washington Post is a complexifier for me. It’s unavoidable that certain powerful people who experience Washington Post news coverage will wrongly conclude I am their enemy.”

A Slate article explores whether it’s a real word, and it is not in standard English. The “investigation” concludes that the word “appears most at home in the canon of self-help business gobbledygook.” As expected, memes, like the one here, are popular.

Bezos’s post is interesting from a business writing and character perspective if nothing more.

Discussion:

  • Analyze Bezos’s post: who are the primary and secondary audiences, and what are his communication objectives? How is it organized? What is the tone?

  • To what extent does Bezos meet his communication objectives?

  • Overall, what’s your view of his approach to address the situation with this post?

  • Which leadership character dimensions does Bezos demonstrate?

More About Failure Resumes

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Two years ago, a Princeton professor’s “CV of Failures” went viral, encouraging all of us to admit our misses and view them as learning experiences. This week, The New York Times popularized the idea in an article, “Do You Keep a Failure Resume?

The author advises a strategy:

“When you fail, write it down. But instead of focusing on how that failure makes you feel, take the time to step back and analyze the practical, operational reasons that you failed. Did you wait until the last minute to work on it? Were you too casual in your preparation? Were you simply out of your depth?”

Of course, what he’s proposing is self-reflection. But the approach is rationale: to think through what happened. Research tells us that a more emotional approach—allowing yourself to actually feel negative emotions from a failure—leads to greater learning and makes it less likely that you’ll make the same mistake in the future.

We may avoid failure because we feel shame. The graphic above shows the difference between failing and “being a failure.” Experiencing failure instead of feeling like a failure helps us be vulnerable instead of feeling what could be debilitating shame.

Quote image source.

Being a Failure image source.

Discussion:

  • How do you typically view failure? Do you try to forget about it? Are you harsh with yourself? Or something else?

  • Do you have a process of regular self-reflection? What could you do on a daily basis to learn from both your successes and your failures?

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.

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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?

Gillette Ad Gets Mixed Reviews

Gillette took a risk with its new ad campaign. Spinning its 30-year slogan, “The Best a Man Can Get,” the company introduced, “The Best a Man Can Be.” A new video references sexual harassment, challenges the expression “boys will be boys,” and encourages men to “hold other men accountable.”

Gillette explains the rationale in a press release. In addition, the URL thebestamancanbe.org redirects to https://gillette.com/en-us/the-best-men-can-be, where the company explains the campaign:

Thirty years ago, we launched our The Best A Man Can Get tagline.

Since then, it has been an aspirational statement, reflecting standards that many men strive to achieve.

But turn on the news today and it’s easy to believe that men are not at their best. Many find themselves at a crossroads, caught between the past and a new era of masculinity. While it is clear that changes are needed, where and how we can start to effect that change is less obvious for many. And when the changes needed seem so monumental, it can feel daunting to begin. So, let’s do it together.

It’s time we acknowledge that brands, like ours, play a role in influencing culture. And as a company that encourages men to be their best, we have a responsibility to make sure we are promoting positive, attainable, inclusive and healthy versions of what it means to be a man. With that in mind, we have spent the last few months taking a hard look at our past and coming communication and reflecting on the types of men and behaviors we want to celebrate. We’re inviting all men along this journey with us – to strive to be better, to make us better, and to help each other be better.

From today on, we pledge to actively challenge the stereotypes and expectations of what it means to be a man everywhere you see Gillette. In the ads we run, the images we publish to social media, the words we choose, and so much more.

As part of The Best Men Can Be campaign, Gillette is committing to donate $1 million per year for the next three years to non-profit organizations executing programs in the United States designed to inspire, educate and help men of all ages achieve their personal “best” and become role models for the next generation.

Our tagline needs to continue to inspire us all to be better every day, and to help create a new standard for boys to admire and for men to achieve… Because the boys of today are the men of tomorrow.

We’ve all got work to do. And it starts today.

Not everyone appreciates the new campaign. The YouTube video received 582,000 likes and 1 million dislikes. Some feel that the video unfairly accuses all men of not doing better.

A Gillette spokesperson said the campaign “is much more than a video—it is a commitment to spark and contribute to positive change through our voice as an advertiser and our actions as a brand and a company.” Analysts say the current boycotts probably won’t last long and will have little bottom-line effect on the company.

Discussion:

  • What’s your view of the video? Do you appreciate the message, find it offensive, or something else?

  • What else, if anything, should the company say in response to the controversy?

  • Which leadership character dimensions are illustrated by this story?