There is at least one thing we can thank Rupert Murdoch for. That’s for getting “wilful blindness” restored to the everyday management and media vocabulary.
In its devastating assessment of Mr Murdoch and his business, the British Parliamentary inquiry into phone hacking concluded the media mogul wasn’t a fit person to lead a major corporation and that he “turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications.”
Their verdict didn’t seem to make much difference to the News International share price, and they have just reported a 47% rise in quarterly earnings. But it is a good reminder that wilful blindness is a major risk when it comes to issue and crisis management. Timing is everything, and Harvard senior Fellow Ben Heineman says the paramount duty of a CEO is to investigate wrongdoing promptly and thoroughly. “You own the problem the instant you hear about it. You will be judged by every action you take, or don’t take, from that moment on.”
For crisis prevention that duty is even more explicit. It is commonly argued that crises are sudden, unexpected events and you can’t do much to prevent them. But research shows most crises are not sudden and are not unexpected. Furthermore, the majority of organizational crises are caused not by external events or by employee error, but by management activity.
Chicago academic Karl Stocker has declared that top management, by definition, is the least informed group in the company. That might be a statement of fact, but it’s not an excuse.
However, Rupert Murdoch didn’t just plead ignorance. He went even further and claimed that some of his own (unnamed) executives deliberately kept him in the dark. Issue management is a proven effective tool to identify problems early and implement effective strategies to help prevent issues becoming crises. Yet it demands a willingness to make the effort, and not to turn a blind eye. The greatest antidote for wilful blindness is undoubtedly to welcome bad news. Long silences signal distortion, not consensus, and issue management provides a neutral framework for executives to objectively identify and assess risks.
Moreover the CEO must be prepared to listen. In the wake of the oil refinery disaster at BP Texas City in 2005, the autocratic Lord Brown lost his job as boss of the oil giant. Brown was famous for not wanting to hear dissenting opinions, and it was reported that only good news flowed upwards at BP. Some years later Brown eventually admitted the disaster was at least partly his fault. “I wish someone had challenged me and been brave enough to say, ‘We need to ask more disagreeable questions’.”
Despite what is obvious to most observers, we have yet to hear such a concession from Rupert Murdoch. As his reputation continues to unravel and the crisis deepens he would do well to heed the advice of another media veteran – CNN spokesperson Steve Hayworth. “People will forgive a screw up, but they will never forgive a cover up.”