The difference between a political crisis and a business crisis, from a media response perspective might be small, but it is important.  The structure to a political crisis has a different focus and context. Politics is structured around wrestling in that the goal is not to “solve” an issue but to create the best solution for the problem when with the resources available. Once done, the task is to move to the next issue without focusing on the previous issues, unless they re-emerge.  By contrast, managers, though political with a small “p”, run business.  Managers are good at solving problems or facilitating solutions by others. They seek to solve the problem and the solution is constantly tended and nurtured with the focus on fending off future threats to that solution.  I argue the two cultures are fundamentally different and that difference has to be understood in the crisis response. http://en.wikipedia.org/wiki/Crisis_management

The political context requires obfuscation and denial as the politician or the political organisation seeks to rebalance itself within the political context.  The goal is not so much to solve the problem as to make it get smaller or go away.  By contrast, the business scandal does not go away and cannot be made smaller so the business can be rebalanced within the business climate.  In that regard, the business crisis usually ends up in the courts.  The political crisis may get to the courts, but for the most part as soon, it leaves the political domain it ceases to have bearing because the revelations and the damage are known. What are left are the consequences and not the crisis itself.

The business crisis usually seeks to use the same techniques as the political crisis because the media advisers work through those assumptions.  For example, the recent scandals at Microsoft show the problems associated with the “political” approach to managing the media side of the crisis.

http://www.telegraph.co.uk/technology/microsoft/8901043/Scandal-hit-Microsoft-admits-blow-to-morale.html

In this story, about sexual harassment, the Microsoft media team try to counter this by downplaying the issue, stressing the family friendly policies and programmes, and taking umbrage at the claims.  The following, taken from the article above, show the approach.

“Our staff were not happy to see Microsoft’s name in your paper, in that way,” “Nobody likes to hear those kind of stories about their own company. Inevitably it causes people to look at it very hard and – you know, we were quite upset by it.”

Since then, Microsoft has not taken any direct measures to change its culture because, the picture painted by the legal battle is “very difficult to square” with what he knows of the company: “I see a very open, respectful culture -constructively self critical. We’re a business like any other business.”

“We’ve got bump-to-balance clubs when they come back to work. We do an awful lot around supporting diversity…in its broadest possible sense,

In effect, the goal is to avoid the issue, focus on the positives, and rubbish the negative comments.  The problem, though, is that it amounts to a denial.  Therein lies the problem. By this approach, the message runs contrary to the business ethos of problem solving.  A stronger approach would be to admit there is a problem, agree to investigate it, and then if wrongdoing is discovered punish it.  Instead, the denial only creates further problems.  More and more witnesses and victims come out wanting to tell their story.  As a result, the media stories continue, which reiterate the problem that Microsoft is trying to deny or downplay.

On the surface, the current approach could work if there was no underlying problem. However, the problem exists in the form of lawsuits and emerging claims.  The goal now has to be see it as a problem that needs to be solved. However, the issue is one tied intimately to the organisation, which makes a problem solving approach.  The hierarchy now realize that the problem reflects the senior corporate culture, which in turn requires a fundamental change.  As the fish rots from the head down, the problem can only be solved at the top.  Yet, that is where the denial is deepest because to admit that it exists invalidates the senior team’s status.

What makes the crisis troubling for Microsoft is that it is similar to the dysfunction in Enron. The culture shares many similarities.  First, they both rely heavily on the rank and yank culture. http://en.wikipedia.org/wiki/Vitality_curve  See also this assessment of Enron’s rank and yank culture. http://www.time.com/time/business/article/0,8599,129988,00.html The apparent sexual harassment culture that seems to emerge with each scandal shares some similarities with what was beneath the surface at Enron. http://crab.rutgers.edu/~mchugh/Enron_s%20Dirty%20Laundry.htm Now, like Enron, analysts have become sceptical of the business.  One hopes that the accountancy issues that brought Enron down are not lurking in the shadows. Even if there are no accountancy issues, Microsoft has to look at its corporate culture.

A fish rots from the head down and the inside.

Related articles

• Does the fish rot from the head down? When organisations go toxic (thoughtmanagement.wordpress.com)
• November 21, 2001: Enron Outlook Negative (caraellison.wordpress.com)