Universities are businesses. Like any business they occasionally have to engage in crisis management,
responding to threats, including those to their brand if not their very existence.
Hamline University is at that point now. Locally and nationally its
reputation is severely damaged. It is at the center of cultural wars. I
receive reports from colleagues overseas in Eastern Europe where I have taught
that my school is now used as a tool of political propaganda in terms of
how in America free speech is squashed. Hamline faculty voted to demand its
president to resign. The University is in a full-blown crisis. The
question is what to do?
I taught in a business school for fourteen years and did corporate, non-profit,
and government consulting. Like others, I often used case studies as
teaching tools, seeking to distill lessons regarding what works or not in terms
of crisis management. What can Hamline learn as it wrestles with its
crisis?
Business crises come in all shapes and sizes. They can be self-inflicted,
such as when Volkswagen was
caught fabricating emissions testing, or in 1985 when Coca Cola rolled
out New Coke in what is arguably the worst market blunder of all time.
The self-infliction can be the result of bad leadership, governance, or hubris
such as when Bernie Ebbers and WorldCom or Kenneth
Lay and Enron began cooking
their financial books to inflate corporate earnings and preserve
executive bonuses. Both the 2005 documentary The Smartest Guys in the Room and
Cynthia Cooper’s Extraordinary Circumstances—arguably
the best book ever on corporate misbehavior , greed, and arrogance—chronicle
these stories.
But business crises can be external. Nokia’s failure to adapt
to changing cellphone market conditions took a business at the top of its game
to one destroyed by Apple and Samsung. The same is true of Blackberry, which at one
point controlled more than 40% of the cellular market. The 1982
post-market tampering with Tylenol was an unforeseen threat to the Johnson & Johnson brand,
but it was and remains a perfect case study in how to navigate a crisis and
recover from it. . Conversely, Ford’s 1970s coverup of the
exploding Pinto and cost-benefit decision on its refusal to change product
design to save lives in order to make money is a case study in
failure.
One can only hope universities and their leadership can learn from
business case studies. Repeated sports and recruiting scandals at schools
pose problems, but often not to the degree of threatening the brand. In
the 1990s the University of Minnesota had
a major basketball cheating scandal but it did not challenge or threaten the school’s
brand. The recent decision by its Board of Regents to
allow its president Joan Gabel to serve on the Securian Board of Directors is
another major misstep, but not an existential brand threat.
But Hamline faces the greatest brand and existential crisis it has ever
faced. I assess no blame and offer no specific policy recommendations on
what to do. But nonetheless based on what business case studies teach us, there
are several things that need to be done in charting a path forward. Here
are ten rules it needs to consider.
First, recognize the problem. Don’t equivocate deny the
problem. It will not go away over time but instead fester and produce a
long-term corrosive impact on the brand.
Two, be honest and transparent. J&J
was fully transparent and open in terms of what it knew about the
adulterated Tylenol. Its public engagement and willingness to talk built
trust with the public and its consumers. When faced with a crisis many
businesses hunker down and go silent. This only furthers distrust,
encourages rumors, and leads many wondering where is the leadership?
Three, admit mistakes. Don’t try to cover up and don’t try to
pretty up a mistake. We all want to hear genuine apologies and
recognition that mistakes were made.
Four, don't speak in doubletalk. Businesses like to hire public relations
consultants and draft press releases written in corporate prose that say a lot
without saying anything. The public sees through this in a second and it
does nothing to build credibility.
Five, act. Do something. Yes, gather appropriate information but do
not engage in paralysis by analysis. Too many businesses face a crisis
by being afraid to act for fear of making the wrong choice. If there is a
house on fire don’t stand around and debate what is the best way to extinguish
it. At some point pour water on it and work from there.
Six, address the short-term crisis first. Solve it first and then
worry about a longer-term solution. A short-term threat to a brand needs
to be immediately addressed, allowing for a longer-term solution when
more information can be obtained, and the emotion of the immediate crisis is
past.
Seven, identify the core mission and values of
your organization. What are they, don they make sense, do they need to be
changed. These values provide the guideposts for how you will resolve short and
long term your crisis and reposition your business for the future.
Eight, identity, consult, and listen to
stakeholders. For businesses they are workers, customers , and potential
customers. For universities, they are faculty, students, alumni, and
donors. But remember—students are not customers—they are learners, and
their relationship is very different from that of a customer who theoretically
is always right.
Nine, separate the interests of the
organization from its leadership. So many crises and mistakes occur when
leaders are unable to separate out what is in the best interests of the
organization versus what is in their best interests. Organizational
interests come first, not self-interest.
Ten. Learn from mistakes. The best
businesses and corporations seek to identify the processes and structures that
produced bad decisions. Continuous learning and changes to organizational
decision-making structures are central to improving business. This was
the core of General Electric’s use of Six Sigma to
improve its business.
As Hamline looks forward to solving its current problems, I hope it learns the
lessons of what other entities faced and follows these ten rules here.
