Hamline University and the Lessons of Crisis Management: Ten Rules to Follow

 

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.

George Santos opens a window to the ethics of political lying

 My latest in the Hill.

New York Congressman George Santos (R-N.Y.), who faces several investigations, is not the first candidate for office accused of lying, yet many seem to act as if he is. The question is whether such lying is ethically, if not legally, wrong and why, and whether there should be laws that make such behavior illegal. For the good of democracy, political lying should not be protected by the First Amendment; there should be sanctions for it.

Lying is supposed to be wrong. We were all taught that. But where is the line between lying and hyping? Nearly half of job resumes have at least one falsehood because people pad their work history and accomplishments to impress potential employers. Advertisers stretch the truth to convince us to buy products. Despite indignation, our society seems to condone some lying.

Unfortunately, American history is rife with candidates for office lying. The lies take different forms. First, they have lied about political or policy facts such as the state of the economy, crime rates, or foreign policy threats. Or they lie about the records or positions of opponents. Sometimes they lie about themselves or their own resumes.

Not all political lies seem to be of the same type. Lies about oneself are arguably the worst.  They speak to the character and fitness of a candidate for office. They are the basis for how most people judge candidates. We assume that honest people will run for office and that, if they are elected, we can trust their judgment to make decisions on a range of issues about which most of us have limited information.

Nonetheless, all lies pose a problem for politics and, ultimately, democracy.

American politics, including campaigns and elections, presupposes or depends upon truth-telling in order for it to operate appropriately. Elections are competitive contests where candidates put themselves and positions forth for voters to decide. Based on what candidates do and say, the public evaluates the merits of resumes and policy positions of those seeking office. Elections are marketplaces of ideas competing for voter approval.

This marketplace fails to work when candidates lie, especially about themselves. There are parallels to other institutions in society where truth-telling is assumed and enforced. 

The adversarial process in court, for example, works only because attorneys are required to act truthfully in presenting evidence. Juries can reach a fair verdict if they are presented with evidence and information they assume is true. Jurors may have to assess witness credibility and sort out the facts, but in the end they do not have to ask whether the facts they were presented are true.

The economic marketplace works only because of a belief in truthful economic activity. Yes, some might ascribe to the laissez-faire attitude of “let the buyer” decide. But most think that  outright consumer fraud or deception is wrong and that it distorts the marketplace. We presuppose all buyers and sellers will tell the truth and not benefit from lies or deception. This is why, in part, insider stock trading is wrong. Fair play and truth-telling is also behind the rules on intellectual  property.

In school, grades work as a fair measure of merit only if one presupposes that students are not cheating. Teachers suppose students are submitting their own work and assign grades based on it.  Thus, there are rules against plagiarism.

Connecting these three examples is the concept of character. Courts, markets and schools rely on trust and reciprocity, and both are related to honesty.

Elections are something like the adversarial process in court, business marketplaces, and grades in school. Candidates for office are like facts presented in court, products or goods for sale, or papers or exams submitted for grades. Political campaigns both cannot ask voters to decide which policies and candidates they like and ask at the same time what is truthful. At some point, there must be a baseline on what is considered true or false.  

Democracy rests on truth and knowledge. The classic First Amendment-defense of a free press and free speech is that the public is entitled to truthful information in order to be able to vote, make informed decisions, and hold the government accountable. Take away the presumption of truth-telling and, simply put, voters and democracy cannot do the job.

On the anniversary of Jan. 6, misinformation poses a greater danger than ever.

What George Santos allegedly did is an extreme version of what other candidates have done. He appears to have lied about who he was and what he represented. He gave voters, perhaps, a false picture of himself. If that’s true, it was resume fraud at its worst, false advertising, and arguably plagiarism all rolled into one. In an era when America has witnessed repeated lies about stolen elections and other matters, perhaps the public is finally disgusted. We need to rethink the outer boundaries of political lying.

Unfortunately, the Supreme Court seems to think that the First Amendment protects lying and has enabled such behavior. The court struck down laws aimed at prosecuting stolen or false military valor and state laws prosecuting political lies. It is incredulous that the constitutional Framers ever would have endorsed the idea of a “constitutional right to lie.” Instead of focusing on the speaker, the law should focus on the rights of the public and democracy to receive truthful information. Until we do that, there will be more candidates and officeholders who lie.

Maybe Nixon Should have Skipped China

 My latest in the International Policy Digest.

More than fifty years ago President Nixon visited China. At the time, the visit was heralded as a major and smart breakthrough in U.S. foreign policy, realpolitik, and international politics. But perhaps in hindsight the visit and what transpired subsequently condemn the decision as perhaps not so good. It laid the roots for contemporary politics that features an ascendant China perhaps on the verge of invading Taiwan and an emboldened Russia invading Ukraine, and both countries challenging the global order rules in place since the Second World War.

Richard Nixon was a classic anti-communist cold warrior. He cut his teeth on the House Un-American Activities Committee persecuting communists both real and imagined. He was also a conservative. In 1972 Nixon was president. The Vietnam War was on, and the USSR and the U.S. were engaged in a costly Cold War rivalry. America officially did not diplomatically recognize the People’s Republic of China. It viewed the then-corrupt and anti-democratic Republic of China (Taiwan) and the Kuomintang as the legitimate Chinese government. This was true even though in 1971, Taiwan was expelled from the UN and its seat was given to the People’s Republic. The U.S. had mutual defense treaties with Taiwan. And Nixon was up for re-election.

Secret negotiations involving Henry Kissinger and Chinese officials produced the February 1972 Nixon visit. For many, especially conservatives and Nixon supporters, their mantra was “Only Nixon could have visited China.” For them, his impeccable conservative and anti-communist credentials made him uniquely capable of this visit.

Nixon’s visit to China and his meeting with Mao Zedong and Zhou Enlai was seen as a major coup. Fostering better relations with China served U.S. interests in countering Soviet influence, and for China, it allowed it to play the U.S. off of the Russians. The opening to China also may have facilitated the end of the Vietnam War, opened its markets to U.S. goods, and fostered significant cultural exchanges between the two countries.

Yet during his visit, Mao and Chinese officials insisted on what would become the “one China” policy. The People’s Republic viewed Taiwan as within its sovereign control, desiring eventual reunification. The U.S. and China agreed to put aside this question about Taiwan’s status during the visit. In the Shanghai Communiqué, the U.S. acknowledged that “all Chinese on either side of the Taiwan Strait [but] maintain there is but one China.” In effect, to forge relations with the People’s Republic, the U.S. was unwilling to unequivocally affirm the sovereignty of Taiwan despite the fact it was an ally and international law spoke to the importance of state borders.

Eventually, though, China had its way with the U.S. and the world. In 1980, the U.S. canceled its defense treaty with Taiwan, and with that formally recognized the People’s Republic as the sole China. With this, the fall of the Berlin Wall in 1989, and the breakup of the USSR, China became the major alternative to the U.S.

Yet even at this point, China was not a global superpower. Its economy was still far smaller than the U.S. but put into motion in the 1970s by Deng Xiaoping were the market reforms that would transform China. The U.S., hoping that trade with China and its expanded role in a global economy would eventually democratize it, pushed under Bill Clinton for its membership in the World Trade Organization and other international organizations. For the U.S., market reforms and global trade held the key to containing and transforming China into a stable partner if not a democracy.

But none of this worked out as planned. As recently pointed out in Mao and Markets, the West underestimated the cultural influence of communism and Mao’s teachings upon the Chinese brand of business. The U.S. also yet again overlooked the importance of political culture and national interests in another country. China prospered with business enterprises having a distinct Mao accent.

Fast forward to the present. China now approaches the U.S. in its GDP. It also aims to build an alternative world order premised not on democracy and human rights, but on its vision of the world. The Belt and Road Initiative is its way to expand its economic influence. And now China is amassing a nuclear and military might to support its foreign policy initiatives. It bullies its neighbors, it has not democratized, and it threatens the sovereignty of an isolated Taiwan.

Now with Russia ostracized by much of the world over its invasion of Ukraine, it and China grow ever closer.

What might have looked like a good move by Kissinger and Nixon in 1972 now looks less promising. Hope for rapprochement with China, its democratization, and the triangulation to check Russia are fantasies. China stands as the rival superpower to the U.S. Nixon’s visit to China, especially with the agreements that took place then, set in place the seeds of a current world order threatening U.S. interests and global democracy.

There is an apocryphal story that when Nixon visited China either he or Kissinger tried to act smart, and they asked Mao or Zhou Enlai: “What impact do you think the French Revolution has had on the world?” The response came back: “It is too soon to tell.” Perhaps now enough time has passed to ask whether the Nixon visit, what they agreed to, and the forces unleashed, as a result, were beneficial to the U.S. and the world order.