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.