Timing Bad-News Messages

This week, we saw two examples of timing communications to improve image.

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President Trump waited until after the important mid-term elections to fire Attorney General Jeff Sessions. President Trump wasn’t happy with Sessions since he recused himself from the Russia election interference investigation back in 2017.

Although Sessions did technically “resign,” he did so at the President’s request. Sessions confirms this in his resignation letter, which begins, “At your request, I am submitting my resignation.”

Facebook capitalized on a busy news day to announce bad news: a report that the company didn’t do enough to stop anti-Rohingya propaganda on its platform. The site may have contributed to escalated violence in Myanmar. Skimm writers joked, “What to say when the midterms are dominating the headlines… Time to drop some bad news. Right, Facebook?”

FB image source.


  • Why didn’t President Trump fire Jeff Sessions after he recused himself? Why is the timing better now, more than a year later?

  • What other examples have you seen of companies taking advantage of news cycles?

  • The benefits of reporting bad news on a slow news day may be obvious. What are the risks?

GM Offers Employee Buyouts

To cut costs, General Motors is offering voluntary severance packages to 18,000 employees. The company is taking this path before mandatory layoffs, which could happen if not enough people leave voluntarily.

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To receive an offer, employees must have been with GM for at least 12 years and be on salary (not an hourly wage), which means more senior-level employees will be leaving. Typically, these employees are in managerial positions and are paid more highly, so the move means more savings.

The company is focusing on its most profitable regions and already cut salaried staff from about 90,000 to 77,000 after selling off its European divisions. At the same time, GM is staffing up technology functions to compete in the self-driving car market. Through its Cruise division, GM is planning to introduce a ride-sharing, autonomous vehicle in 2019.

Office image source. Cruise image source.


  • Why would a company choose a voluntary severance model instead of mandatory layoffs?

  • What factors should employees consider before deciding to take a package?

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.”

Image source.


  • 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?

Bad News at Verizon and Sears

Verizon and Sears employees are facing job loss in the coming months.


Verizon is outsourcing some technology functions to Infosys, resulting in 2,500 jobs leaving the company.

At first, Verizon wasn’t planning to offer severance, but pressure from employees caused company leaders to change the approach. Timing was part of the problem: last month, 44,000 Verizon managers were offered a voluntary severance package to leave the company. Now, about 1,000 employees have a choice of whether to work for Infosys or accept severance pay.

Sears is declaring Chapter 11 bankruptcy after years of attempts to save the department store. The company has been steadily shedding stores. Only 700 are left, down from 1,000 in February, and more than 3,000 about a decade ago.

CNN reports that Sears has been warning investors that they may go out of business, and suppliers are requiring payment up front.

Sears image source.


  • What’s your view of Verizon’s severance plans: unfair, discriminatory, financially necessary, based on sound principles, or something else?

  • Sears investors and suppliers recognize the likely fate of Sears. How prepared do you think employees are? What could the company do to help employees at this point?

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.”

Thompson photo source.


  • 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?

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.


  • 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

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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.”


  • 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.

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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.


  • 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?

JD.com CEO Arrested for Sexual Misconduct

JD Stock.JPG

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.

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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.

Liu image source.


  • 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?

Jack Ma Will Leave Alibaba


Founder and Executive Chairman of Alibaba, China's largest e-commerce company, will step down, a process started five years ago when he transitioned out of the CEO role. Jack Ma is a powerful figure because of his billionaire success and his leadership reputation. Duncan Clark, author of Alibaba: The House that Jack Built, describes Ma as "an iconic figure" and "the most recognizable symbol of the China internet explosion and more broadly the China consumer boom."

Although the news had hit major media outlets, the Alibaba Group website doesn't yet have a posted press release. A Financial Times article includes this quote from Ma via The South China Morning Post: “I sat down with our senior executives 10 years ago, and asked what Alibaba would do without me. I’m very proud that Alibaba now has the structure, corporate culture, governance and system for grooming talent that allows me to step away without causing disruption.”

The move comes as Chinese tech stocks fall out of favor, partly because of regulatory and trade concerns. The Wall Street Journal reports that Ma will pursue philanthropic interests.

Image source.


  • What impact do you think Ma's decision will have on the Alibaba Group?
  • Should the company have a press release posted on its website? What would be the value?
  • Draft a press release announcing the decision.

President Trump Criticizes Google

In two tweets, President Trump criticized Google and other technology companies of "suppressing voices of Conservatives and hiding information and news that is good." Calling the situation "very serious" and "very dangerous," he claims that "fake" liberal news is elevated in search engines, while "fair" Republican/Conservative perspectives are suppressed.

The president's evidence is based on searching for "Trump News," which he claims resulted in 96% of stories from "National Left-Wing Media." The data came from Lou Dobbs' reporting on Fox Business Network about an "unscientific study" by PJ Media, a conservative organization.

It's also unclear which news organizations Fox and President Trump put in the "left-wing" category. A Wall Street Journal article explains that the president considers even mainstream media outlets to be "fake news," so what he calls unfair representation may not align with a "statistically neutral news aggregator." 

Yet the article acknowledged that the search engine algorithm for Google News is "opaque." In addition, Facebook was questioned during Congressional Hearings about suppressing conservative views, and several technology companies did recently close accounts belonging to Alex Jones and InfoWars, a conservative organization, for violating terms of agreement. Social media sites (except Twitter, which has retained Jones's account) provide reasons for closing Jones's account such as his claiming that the shooting at Sandy Hooks Elementary School in 2013 was a hoax.

A spokesperson for Google denies biased search results:

"We continually work to improve Google Search and we never rank search results to manipulate political sentiment."


  • Try to find evidence on both sides of this argument: that Google News is unbiased against President Trump and that his claims are unfounded.
  • What's your view about Google Search results? How might your own political perspective factor into your view?
  • How can you ensure that you're getting the most balanced news possible? (Hint: Don't rely on your Facebook feed.)

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.

Image source.


  • 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?

Maryland Apologizes for Football Player's Death

University of Maryland at College Park has taken responsibility for mistakes during training that caused a football player's death. During a news conference, President Wallace D. Loh said he met with the student's parents to apologize. After the investigation, Loh concluded:

"The University accepts legal and moral responsibility for the mistakes that our training-staff made on that fateful workout day." And to the parents, "You entrusted Jordan to our care, and he is never returning home again."

Such an admission is unusual and welcome in light of cover-ups and shifting blame.

As a result of this incident, the head coach was placed on leave and another coach, Rick Court, has left the university. Court had been accused of "name calling and other intimidation," according to a Chronicle report.

Some are calling for Loh's resignation as well. Trouble started with the athletics director around the same time. Loh has publicly expressed concerns about how these situations might affect his presidency:

“That’s the sad part,” he said. “I think most presidents have to hold on for dear life. Many, many presidents have not been able to bounce back.”


  • In what ways does Loh make himself and the University vulnerable, and how might this work in their favor?
  • Did Loh do the right thing? Should he resign?
  • Assess Loh's news conference. What does he do well, and what could he improve?
  • How well does Loh express compassion during the news conference?

Alaska Airlines Responds to Rogue Employee Takeoff

Without authorization, an employee manned an Alaska Airlines plane, operated by Horizon Air in Seattle, and took off. In audio files from the plane, the employee mentions his experience playing video games and wonders whether the airline will employ him if he lands well. Sadly, he didn't: the plane crashed.

On its website, Alaska Air posted a statement, "Information on Horizon Air Aircraft." Included is a quotation from Alaska Air CEO Brad Tilden including this paragraph:

“We are still gathering facts, but at this point we understand there was only one person aboard, an employee of Horizon Air, who was operating the aircraft. I want to share how incredibly sad all of us at Alaska are about this incident. Our heart is heavy for the family and friends of the person involved."

The Horizon Air CEO also included a statement, and COO Constance von Muehlen created a video.

Alaska Air image source.


  • Why does Alaska Air title the web page, "Information on the Horizon Air Aircraft"?
  • Review the message sequence on Alaska Air's site. How well is the company communicating information about the incident?
  • How well do the three executives communicate the news? What, if anything, should they change? What is the value of von Muehlen's video compared to the written statements?

Barnes and Noble CEO Gets Fired

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The Barnes and Noble board isn't giving any details about why CEO Demos Parneros was terminated. In a brief press release, the company cited "violations of the Company’s policies" and stated that the decision wasn't based on "any disagreement with the Company regarding its financial reporting, policies or practices or any potential fraud relating thereto."

However, the CEO's termination will result in a loss of severance pay, and he will no longer serve on the company board. Parneros joined Barnes and Noble in 2016 and accepted the chief position just a year ago. Given his short tenure with the company, the consequences seem reasonable.

Perhaps unusually, the statement emphasizes legal counsel:

This action was taken by the Company’s Board of Directors who were advised by the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP. 

To me, this sounds unnecessary and defensive: of course a company would receive legal counsel in such a situation.

Cover image source.

Parneros image source.


  • Why would the board of directors not say more about why Parneros was fired? Should they?
  • What are the downsides of failing to reveal the reason for the termination?
  • What are your thoughts about the statement, particularly the reference to legal counsel? Why would the board include this? Could it be self-promotional for the law firm?
  • Which leadership character dimensions are illustrated by this situation? Which may be lacking?

Tesla Employee Accused of Sabotage

A Tesla employee is accused of hacking into the computer system and changing code that affected the manufacturing process of the Model 3 car. The company believes this is the reason for the production delays.

CEO Elon Musk sent an email to employees, explaining the situation and asking them to report anything that looks "suspicious." He also writes, "This can be done in your name, which will be kept confidential, or completely anonymously." Musk blames an employment dispute:

"The full extent of his actions are not yet clear, but what he has admitted to so far is pretty bad. His stated motivation is that he wanted a promotion that he did not receive. In light of these actions, not promoting him was definitely the right move."

Musk gives other possible explanations for the deceit. He mentions short-sellers and members of the oil and gas industry who "don't love the idea of Tesla advancing the progress of solar power & electric cars."

The employee, Martin Tripp, disputes the claim, saying he was a "whistle blower." According to Tripp, he merely sent a query to a database to confirm waste and safety issues he saw at the company. Tripp has worked for Tesla since 2007.

Meanwhile, an email exchange between Musk and Tripp has become public:

Tripp: “Don’t worry, you have what’s coming to you for the lies you have told to the public and investors.”

Musk: “Threatening me only makes it worse for you”

Tripp: “I never made a threat. I simply told you that you have what’s coming. Thank you for this gift!!!!”

Musk: “You should ashamed of yourself for framing other people. You’re a horrible human being.”

Tripp: “I NEVER ‘framed’ anyone else or even insinuated anyone else as being involved in my production of documents of your MILLIONS OF DOLLARS OF WASTE, Safety concerns, lying to investors/the WORLD. Putting cars on the road with safety issues is being a horrible human being!”

Musk: “There are literally injuries[sic] with Model 3. It is by far the safest car in the world for any midsize vehicle. And of course a company with billions of dollars in product is going to have millions of dollars in scrap. This is not news.

“However, betraying your word of honor, breaking the deal you had when Tesla gave you a job and framing your colleagues are wrong and some come with legal penalties. So it goes. Be well.”

Image source.


  • I'm curious about the possibility of employees reporting anonymously when Musk gives an email address. How is this possible?
  • Have you been in a situation where you were unhappy with how you were treated by management? What resources were available to you?
  • Assess Musk's email to employees: the audience focus, organization, tone, and so forth. What works well, and what could be improved?
  • What's your view of the dispute between the company and the employee? With whom do you side, and why?

Tesla Layoff Memo

Tesla will cut about 9% of its staff, according to a memo sent to employees. In the message, CEO Elon Musk is direct about the decision, which he claims addresses some overlapping roles. Musk also says that profits haven't been a priority but that the company must now focus on profitability to be successful.

In the last paragraph, Musk expresses his gratitude to those leaving the company:

"To those who are departing, thank you for everything you’ve done for Tesla and we wish you well in your future opportunities. To those remaining, I would like to thank you in advance for ult job that remains ahead. We are a small company in one of the toughest and most competitive industries on Earth, where just staying alive, let alone growing, is a form of victory (Tesla and Ford remain the only American car companies who haven’t gone bankrupt). Yet, despite our tiny size, Tesla has already played a major role in moving the auto industry towards sustainable electric transport and moving the energy industry towards sustainable power generation and storage. We must continue to drive that forward for the good of the world."

A Bloomberg article criticizes the memo for burying news that it will end its partnership with Home Depot. Musk does address the issue, particularly how employees are affected, in the fifth paragraph.

Image source.


  • How clearly does Musk's memo communicate the news the employees?
  • What organizational approach does Musk use in the memo? How effective is this approach given the situation and audience?
  • What's your view of Bloomberg's criticism about the Home Depot decision? How, if at all, could Musk have handled this differently?
  • What leadership character dimensions are demonstrated in Musk's memo? Where, if at all, does he fall short?

Analyzing Communications Around the USC Crisis

After the University of Southern California's president resigned last month, crisis communication experts analyzed university messaging. When a gynecologist was accused of inappropriate exams and comments over decades working for the university, 200 faculty called for President C.L. Max Nikias's resignation. Faculty wrote that they believed Dr. Nikias "has lost the moral authority to lead the University.” Although the Administration denies any type of coverup, the gynecologist was allowed to continue in his job even after many allegations in 2016. Dr. Nikias did resign.

A Wall Street Journal article chronicles the following university communications:

A May 21 statement from university Provost Michael Quick denied university leadership knew of the doctor’s improper behavior, stating: “It is true that our system failed, but it is important that you know that this claim of a cover-up if patently false.” Prior to that, the university issued statements about the matter from Mr. Nikias on May 18 and May 15, and statements from other university officials on May 15 and May 16. University administrators also are contacting students.

Criticism of the communication includes sounding defensive, not completing the investigation quickly enough, and failing to report investigation results to those affected. One writer complimented the statement by the chair of the university's executive committee.


  • How does this situation illustrate character dimensions such as vulnerability, accountability, and integrity?
  • Read the executive committee chair's statement. In what ways does the statement illustrate authenticity? What other character dimensions are illustrated?
  • Assess the university's other statements. What's your assessment of each?
  • What should the university do at this point to rebuild trust?

University of Oregon Apologizes for Statement About Student Death

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University of Oregon leadership missed the mark in its statement about a student's death during a lake trip. Although the university offered sympathy in the original notice, the statement included language that seemed to blame the student:

It is important to point out that this tragedy is connected to an unauthorized tradition among many college students. Students from many institutions have a history of demonstrating poor life choices during visits to Lake Shasta. These activities are contrary to the values of the University and Fraternity and Sorority Organization.

When criticized for the tone and insensitivity, leaders published a new statement, which excludes this paragraph, and posted their regret on Twitter.

University officials may have wanted to use the student's death as a lesson or a warning to others. On the face of it, this strategy wasn't all bad. After all, Shasta Lake is a known partying site and has been in the news for tents and other debris left by college students. One Twitter user commented, "I think the first statement was more appropriate. Although this young man's death is tragic, bad choices have bad consequences."


  • What's your view? Was it wrong for the university to include that statement? Why or why not?
  •  If not in this statement, what should the university leaders have done differently if they did want to focus on future safety?

Communications About Cuba Plane Crash

A plane crashed near the Havana, Cuba, airport, leaving more than 100 people dead and only three survivors. Cuban President Miguel Diaz-Canel delivered the bad news:

"There has been an unfortunate aviation accident. The news is not very promising. It seems that there is a high number of victims."

The president also described recovery efforts:

"Things have been organised, the fire has been put out, and the remains are being identified,"

The reason is unknown, although an Al Jazeera article referred to the Boeing 737 as "aging." Aviation accidents are rare, but a BBC article chronicles several, including the previous crash in Cuba, in 1989, which killed 150 people.

Image source.


  • How well does the president communicate the events? We see only two short quotes here, so he may have said more. What else should he say? How can he communicate compassion?
  • Research communications around other deadly plane crashes. How do the situations compare, and how should the communications differ?
  • Should Boeing make a statement about the situation? Why or why not?