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Monday, March 15, 2010

Molested in a Runaway Prius: The Top Ten List

I've been home-bound for a few days due to knee surgery. As a Catholic who owns two Toyotas, and proud on both accounts, it's been tough to avoid the news. The hysteria over 30 year old allegations of priestly impropriety has moved from the U.S. to Ireland and now to Germany. The smart money inside the Church is that Spain is next. Meanwhile, "Me too!" runaway Toyota incidents with lawyers and reporters on standby plague the world's largest automaker.

Being a student of institutional behavior, and a great admirer of these two great institutions, it's pained me to watch them get behind the story in their respective news cycles. Meanwhile, Late Night host David Letterman sets the standard for getting past his own reprehensible behavior of having sex with young female staffers over whom he had authority as host of the show and owner of the show's production and distribution company, Worldwide Pants.

The differences in how these three companies handled their respective scandals is a lesson in being nimble when trouble strikes. Both the Catholic Church and Toyota are old and venerable organizations with their own cultures. They see the world through their own lens and are almost incapable of seeing themselves as the world sees them. Letterman's company, by contrast, is a media company and understands the news cycle as well as anyone. When trouble struck, how all three reacted gives all other companies a cautionary lesson in handling crisis communications.

The Church's sex abuse scandal began in 2002 with a series of stories in the Boston Globe. These first cases were legitimate; where serial pedophiles working as priests in the Boston diocese were knowingly moved from parish to parish by Cardinal Bernard Law without regard for the safety of those parishes children. When the story broke the Church first obfuscated, then gave vague assurances that all was well, and only addressed the story after multiple lawsuits were in the works. It looked slow and out of touch and, by inference, guilty.

The truth of the scandal, which still goes on today, is that the majority of abuse cases were brought forward after 2004, two years after the original disclosures. Over 70% of those cases were for abuses committed between 1962 - 1974. Less than 1% of the Church's priests in the U.S. were responsible for over 60% of the accusations. So how does such a small number of predators taint the world's largest religious organization? Lawyers, money, and the smell of blood in the water. Two organizations, SNAP (Survivors Network of those Abused by Priests) and Voice of the Faithful are full of attorneys and people selling books and speaking engagements about pedophile priests. They have opened branches both theologically and regionally and raise money off their websites. This story won't die until they've run the table on all religions and regions.

The Toyota story is similar, in that the problems with it's models came from prior years and the mistakes of a prior CEO. During the late 1990's through about 2007 Toyota expanded it's production 50% in order to gain bragging rights over GM as the world's largest automaker. To expand that quickly they built new factories in foreign countries and for the first time ever allowed non-Japanese owned parts suppliers to make critical parts. All the sticking accelerator pedals came from one Canadian supplier.

When early trouble came, about two years ago, Toyota obfuscated and denied any problem, and in the process looked guilty. When news of multiple deaths of sticking pedals came to light, they were already behind the story. When the news broke worldwide there were 19 cases over 9 million cars over 10 years. Now there are 54 reported cases, none of which can be verified or reproduced. There are 64 class action lawsuits against the company and law firms worldwide are trolling for new plaintiffs. Even those not experiencing defects are being encouraged to join class actions for loss of resale or trade-in value due to the scandal. As with the Church, blood in the water, money and lawyers have given the story a life of it's own.

Now compare that to the biggest non-story of the year: David Letterman's assignations with female staffers. When faced with possible extortion, Letterman went public first, said he did it, made fun of it, and that was that. His extortionist plead guilty last week and Letterman is still #1 on late night television. Benedict and Toyoda are the guys cleaning up someone else's mess, but the press and the lawyers don't care. That's not consistent with their narrative. Meanwhile Letterman goes on about his business.

So what's the critical learning for our organizations?

1. Tell you story first.
2. If you screwed up, decide how to fix it
3. Make communicating that part of your story.
4. Take care of anyone you've harmed or injured. Handling real claims early is cheapest.
5. Put together a team of PR, HR and legal to work cross-functionally on the situation.
6. Use your team to push back immediately and aggressively on those "Me too!" claims.

Your goals are to (7) make sure internal and external stakeholders know that you're the good guys, (8) fix what you've broken, and (9) let the bad guys know that any ill-gotten profit from your problems won't be quick or easy. Finally, (10) do some soul searching on how this happened (as Toyota and the Church have both done well) and make sure this doesn't happen again. The alternative, as my two much-loved institutions are finding out, is a decade of litigation.


Anonymous said...

Actually, the Catholic sex abuse scandal began in the mid-1980s in Louisiana, with stories about Gilbert Gauthe.

Jim Thomason said...

Point well taken in that this was a national scandal. My intent was to discuss the roots of the current scandal which began in Boston in 2002. Thanks for the comments.