Facing the Challenge of Internal Wrong-Doing

There was an interesting case study reported on recently on the CBS news show, 60 Minutes.    It tells the story about the Archbishop of Dublin, Diarmuid Martin, who has challenged the Catholic Church in an unusual way.  I think it also tells the story of how to address a bad situation in a proactive way that moves you past the problem.  (You can  watch the segment.)

Many of us in positions of corporate responsibility know that when we face a situation where something goes wrong, the decision about what to do is fraught with peril.

It doesn’t matter if it is a design flaw that may warrant a recall, one of your managers who violates someone’s human rights, an at-work accident or something more far-reaching like the BP oil platform explosion.     Your legal advisors scare the heck out of you, encouraging you not to admit anything for fear of the consequence of potential lawsuits – even criminal charges.  Yikes!

Even if you want to do the “right” thing, it is not always easy to assess what that is.  There are many things to weigh, such as:

  1. Your fiduciary responsibility to your shareholders (if your actions and comments expose the company to legal action – the costs could be unthinkable)
  2. The fact that you don’t want to hurt someone.  (People make mistakes.  If you decide to “hang someone out to dry” as a result – you may be causing profound implications for that individual’s life).
  3. The fact that you may inflict pain on many more innocent people.  (if you admit an error – and the company has to pay a large settlement, what will the financial implications be?   Eliminating bonuses?  Laying off people, or cancelling discretionary capital or R&D projects?)
  4. The realization that you (or someone else) may face criminal charges (Most lawyers are pretty good at imagining all of the worst case scenarios out there.  What did you know, when did you know it, and did you cover it up?  Or, you may be faced with feeding one of your long-time employees to the wolves.)

There is a lot to weigh. And deciding on the right course takes leadership courage and commitment.   Not so easy.

The case of Archbishop Martin is an interesting one.  His actions are both humble and courageous.   So what does he teach us?   Here are some thoughts suggested by John Baldoni that warrant consideration.

1)    Address the wrong-doing. When scandal strikes, organizations want to protect themselves. Ironically, the best they can do is come clean. Running from the problem makes it worse. Executives who run from problems, rather than confront them, only make things worse.

2)    Do not err on the side of caution; err on the side of the victim. Apologize. Then, right the wrong. Do it quickly and efficiently. Remember always that your company made the mistake; it is your responsibility to fix it.

3)    Let the wronged vent. When people are hurt, either from services you render or products you offer, you need to make restitution. But part of that process should involve more than an apology. In private meetings with victims, Bishop Martin encouraged the abuse survivors and their families to tell him their stories. When they spontaneously interrupted a service he was holding to air their grievances, he listened. It’s not easy to hear the pain your organization has caused. But it is necessary for healing.

4)    Be engaged. When trouble brews within your organization, it may not be enough to stand back and let others do the work. Sometimes it is necessary to put yourself into the front lines and stay there. When mistakes have hurt people, both employees and victims need to see their leader actively working to right the wrong.

I think anyone in a leadership position in business potentially faces the chance of a scandal or crisis.   You need to consider ALL the perspectives around you (including your CFO, corporate counsel, employees, management team, etc.)  But remember that while all these people have valid viewpoints, they tend to be one-dimensional.  It is YOUR JOB to factor in all the views and weigh them – making a decision that is consistent with your values and balances the risks you are likely facing.

If some of you have stories about facing a crisis or scandal that you feel were handled well, we’d love to hear them.

Related Article:

You’ve discovered wrong doing, now what? , by John Baldoni, CBS Moneywatch


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Filed under Leading, Personal Leadership

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