Sony Pictures needs a crisis communication leader

The cyberattack crisis Sony Pictures is facing is beginning to look like an onion with infinite layers.  First it was concern about the studio’s yet-to-be-released film, “The Interview.”  Then it was the embarrassing (and worse) emails, salary disclosures, and other things executives would have preferred stayed internal.  Then the studio said the film would not be released as planned on December 25.  And in between all this, actors and directors Seth Rogen and James Franco cancelled a variety of planned promotional appearances – making more news. 

Now the President of the United States says that Sony “made a mistake” by pulling the film.  But Sony Pictures Entertainment CEO Michael Lynton says the film decision was a postponement rather than a cancellation.  On Sunday representatives for Sony reinforced this point, assuring that the movie would be seen without suggesting how or when.  This points to the primary crisis communication leadership problem here. While this crisis has begun to stretch its tentacles well beyond Sony, it began with Sony.  And Sony has made its crisis worse through its uneven and sometimes cavalier response. 

When embarrassing emails were leaked, how many of us thought “Gee, I wonder what I’ve written in thoughtless haste that would embarrass me”?  There was some sympathy for Sony.  But then the company brought lawyers in to serve notice to media including the New York Times and Wall Street Journal that they’d pay a price for distributing any material they obtained through the cyberattack. This served only to highlight the content of the emails and even smacked of desperation.  And apart from some half-hearted apologies from executives, including Sony Pictures co-chair Amy Pascal, there’s been precious little from Sony suggesting that they believe they have contributed in any way to the crisis. 

Crisis leadership is lacking.  Yes, they were hacked.  Yes the hacking was of mammoth proportions.  But then questions were asked about how the company’s security tools could have allowed this to happen.  In response Sony said, essentially, that any organization with the best cybersecurity would not have withstood this hacking.  Lawsuits are now following, filed by employees who blame the company for release of their personal data.  Citing existing policies and promising a review and remedy would have been useful in garnering more public support.  More public mea culpas from the executive suite would have also been appropriate.  Lynton shifted blame to distributors regarding the cancellation or postponement of the film’s release.  There are many ways to distribute the film.  At last those options are being acknowledged.  Lynton says they’re exploring possibilities, but that his company is not in the distribution business. It has been a chaotic response, lacking much semblance of a solid strategy. 

Crisis communication scholarship, including my own, suggests a different way.  How the public perceives the cause of a crisis has a great deal to do with how responsibility is attributed.  When Sony was the victim, responsibility for the crisis fell elsewhere.  Now Sony has allowed at least some perception of responsibility to drift back to the corporation.  It has attacked or dismissed key publics and has paid the price.  Simply put, Sony is more likely to succeed if it cultivates rather than alienates relationships with key publics.  Pre-existing relationships matter in crisis communication, but so does the tending of those relationships in the midst of a crisis.

Most would agree that this is perhaps an unprecedented cyberattack that has now been linked to North Korea, according to the FBI.  And as with any organization-threatening crisis the ground has been shifting under Sony Pictures executives mercilessly.  New facts emerge daily requiring strategic adjustment.  That’s precisely why it’s time to stop finger-pointing at the media, at North Korea, at theater owners.  Sony Pictures needs to take hold of the situation, take responsibility where appropriate, clearly lay out a way forward for “The Interview,” announce internal reviews and repercussions, and review security tools and policies.  That’s the leadership that’s needed in this crisis.  So far, it’s been missing.

A version of the post was published on the Grady College website on December 27, 2014

Compassion and competence must find a balance in the GM ignition recall crisis

“I am deeply sorry.”

It’s not often you will hear a CEO express an apology for a company failure, particularly when the company is in crisis.  The corporate lawyers will nearly always advise against an apology because, they say, it admits blame.  Not something you want to do if you think you’ll end up in court.  But that’s exactly what General Motors CEO Mary Barra did when she went before a House Subcommittee this week.  She has been engaged in full-fledged crisis communication, which serves as an ongoing case study in crisis communication tactics.

Barra, who became GM’s CEO on January 15, has been embroiled in a series of automotive recalls totaling 6.3 million cars and trucks.  But it was the 2.6 million cars recalled for an ignition defect that has resulted in 13 deaths that was the primary topic before Congress.  Many credit Marietta lawyer Lance Cooper for bringing the breadth of the GM ignition problem to light, causing the company to extensively expand its recall.  It was his work on behalf of the family of Brooke Melton, who died in 2010 when her 2005 Chevy Cobalt lost power and swerved into oncoming traffic, that got GM’s attention, experts say.

A maxim in crisis communication is this: Tell it all, tell it fast, tell the truth.  How has GM done?

Tell it all.

As Barra testified before Congress this week she said, “When we have the answers, we will be fully transparent with you, with our regulators, and with our customers.”  While the sentiment is right, the dictum to “tell it all” seemed unsatisfied as she responded to question after question with assurances that, while she doesn’t have the answers now, they will be forthcoming following the findings of an internal investigation.  Beyond her assurances at the hearings, after her second day of Congressional grilling before the Senate Subcommittee, Barra released a statement promising to “keep Congress informed”.

But lawmakers and family members of those killed in the recalled cars accused GM of a culture of secrecy.  In fact, a front page story in the New York Times reported GM has “refused to disclose publicly the list of confirmed victims” increasing the pain and frustration of survivors.

Barra’s prepared testimony before Congress acknowledged a problem and asserted that as soon as she knew about it, it was made public.  But even the title of the testimony to the House Subcommittee, “The GM Ignition Switch Recall: Why Did it Take So Long?,” admits the second part of the maxim was missed.

Tell it fast.

It is common knowledge now that as early as 2005 GM engineers had identified and were trying to solve the ignition problem.  But no recalls or the information surrounding them were forthcoming until recently.  And company documents reveal that when a fix was found, it was determined to be too expensive.  Barra said it would have cost GM about $100 million in 2007, much more today.  But she also admitted she thought GM had been more of a “cost culture” and promised a customer-centered culture going forward.

It remains to be seen whether Barra’s GM will “tell it fast” when it comes to revealing facts from the internal investigation.

Tell the truth.

While we may not have all the information, Barra is giving the appearance of being forthright.  She may not be saying a lot, but much of what she is saying is hard – case in point being the already noted apology.  In her statement to Congress Barra said the latest round of recalls (the company recalled 1.5 million more vehicles the day before her House testimony) proved the new GM’s devotion to truth.  “We identified these issues.  We brought them forward and we are fixing them,” her statement said.  Given the internal documents that revealed the cost concerns surrounding a fix, if we learn via smoking-gun emails or the like that GM leadership withheld anything they knew, the damage to GM will deepen.

Big, established brands like General Motors are better positioned to weather crises than are smaller or newer companies.  But still, GM has a long way to go to re-establish the trust of consumers.  Finger-pointing at a past corporate culture will not work for long unless real, honest, transparent progress is made.  In her testimonies this week, Barra appeared compassionate on the one hand but seemed uninformed on the other.  For GM to recover quickly and for Barra to establish her credibility as the company’s new leader, compassion and competence will need to find a balance.

A version of this post was published on April 9, 2014 in the Marietta (GA) Daily Journal.