McKinsey Pays Settlement for Work with Purdue Pharma

Management consulting company McKinsey will pay almost $600 million to settle several lawsuits over its role in the opioid crisis, including offering marketing advice to Purdue Pharma. The largest settlement is for $573 million, which Massachusetts Attorney General Maura Healey describes in a video.

Healey’s presentation and delivery are interesting because she represents families and is speaking for 47 attorneys general in several U.S. states. Her anger is evident, but her audience is small: only 53 views one week after it’s posted, and at least three of those are me. What are the communication objectives? This will make a good class discussion.

McKinsey’s response is also interesting for students studying business communication and character. In an email to staff, Global Managing Partner Kevin Sneader describes “setting a higher standard.” Whereas the governors consider McKinsey’s actions unlawful, Sneader does not agree:

“Indeed, while our past work with opioid manufacturers was lawful and never intended to do harm, we have always held ourselves to a higher bar. We fell short of that bar. We did not adequately acknowledge the epidemic unfolding in our communities or the terrible impact of opioid misuse and addiction, and for that I am deeply sorry.”

The Massachusetts court filing explains the legal argument.

At some point in 2019, two McKinsey executives debated in emails “eliminating all our documents and emails.” These executives have been terminated. (See McKinsey communications.)

Amazon Announces New CEO

In a news release, Amazon announced that CEO and Founder Jeff Bezos will be stepping down, transitioning to role of Executive Chair of the board. He will be succeeded by Andy Jassy, currently CEO of Amazon Web Services. The change won’t take place until the third quarter of 2021.

The news is announced in two short paragraphs within the company’s fourth quarter results:

Amazon is also announcing today that Jeff Bezos will transition to the role of Executive Chair in the third quarter of 2021 and Andy Jassy will become Chief Executive Officer at that time.

“Amazon is what it is because of invention. We do crazy things together and then make them normal. We pioneered customer reviews, 1-Click, personalized recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice, and much more,” said Jeff Bezos, Amazon founder and CEO. “If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive. When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”

In a longer message to employees, Bezos writes in the same conversational style, but he is more inspirational. The email is also posted on the Amazon public site.

The change is big news and garnered the lead Wall Street Journal story today with the headline, “Amazon CEO Change to Come Amid Regulatory Scrutiny.” The article cites Amazon’s 44% profit increase in the fourth quarter of 2000 as well as the challenges ahead:

“But Amazon also faces the biggest regulatory challenges in its history, with multiple federal investigations into its competitive practices and lawmakers drafting legislation that could force Amazon to restructure its business. Tension with regulators and lawmakers has directly embroiled Mr. Bezos, who was called to testify in front of Congress last summer for the first time.”

Bezos also was in the news recently because his ex-wife, MacKenzie Scott, donated $5.9 billion in the past year. A New York Times article contrasts her philanthropy with criticism about Bezos’s extraordinary wealth and lack of attention to environmental issues and employees’ concerns. A Vanity Fair author writes, “She got even [for his having a public affair] by doing what he does not: sharing his unbelievable, unconscionable, indescribable wealth with those he makes his money off of, i.e. everyone else in the world.”

Image source.

GM CEO's Letters to Environmental Leaders

General Motors has changed its position on climate change. The company, led by CEO Mary Barra, had supported President Trump’s efforts to eliminate California’s ability to set its own strict environmental standards.

With a new incoming president, Barra communicated that the auto industry will likely support President Biden’s environmental policies. The news came in the form of a letter to environmental leaders and encouraged “customer adoption of electric vehicles.” Barra also touted GM’s ability to meet the demand. She ends on a positive note: “This effort is critical to addressing climate change, and we look forward to working together.”

A New York Times writer calls the move a “maneuvering” and “a public humiliation to Mr. Trump” since he was still in office at the time. A public policy professor noted, “This is about as bold as it gets. This huge pivot, so closely following an election result, particularly from a firm like General Motors, is a big, big deal.”

Twitter Announces Ban of President Trump

Two days after the riots on the U.S. Capitol, Twitter announced a “permanent suspension” of President Trump’s account after a temporary suspension.

Comparing Twitter and Facebook’s message, on January 7, about a temporary suspension, is a lesson in writing structure. Whereas Mark Zuckerberg used the indirect organizational plan, Twitter’s message states the news right up front. Zuckerberg starts with the rationale and announces the decision at the very end. Twitter starts with the decision, and then provides explanatory text, including sample tweets and the company’s assessment.

Another difference between these messages is the writer. The Twitter post is unsigned, whereas Zuckerberg signed the Facebook message himself. Additional rationale for the decision is posted on the Facebook site. Both approaches could work, and analyzing the communication is (almost) as interesting as the decisions themselves.

Random note: “Permanent suspension” sounds odd to me. A suspension is something temporary.

---

Company

Permanent suspension of @realDonaldTrump

By Twitter Inc.Friday, 8 January 2021

After close review of recent Tweets from the @realDonaldTrump account and the context around them — specifically how they are being received and interpreted on and off Twitter — we have permanently suspended the account due to the risk of further incitement of violence. 

In the context of horrific events this week, we made it clear on Wednesday that additional violations of the Twitter Rules would potentially result in this very course of action. Our public interest framework exists to enable the public to hear from elected officials and world leaders directly. It is built on a principle that the people have a right to hold power to account in the open. 

However, we made it clear going back years that these accounts are not above our rules entirely and cannot use Twitter to incite violence, among other things. We will continue to be transparent around our policies and their enforcement. 

The below is a comprehensive analysis of our policy enforcement approach in this case.

Overview

On January 8, 2021, President Donald J. Trump Tweeted:

“The 75,000,000 great American Patriots who voted for me, AMERICA FIRST, and MAKE AMERICA GREAT AGAIN, will have a GIANT VOICE long into the future. They will not be disrespected or treated unfairly in any way, shape or form!!!”

Shortly thereafter, the President Tweeted:

“To all of those who have asked, I will not be going to the Inauguration on January 20th.”

Due to the ongoing tensions in the United States, and an uptick in the global conversation in regards to the people who violently stormed the Capitol on January 6, 2021, these two Tweets must be read in the context of broader events in the country and the ways in which the President’s statements can be mobilized by different audiences, including to incite violence, as well as in the context of the pattern of behavior from this account in recent weeks. After assessing the language in these Tweets against our Glorification of Violence policy, we have determined that these Tweets are in violation of the Glorification of Violence Policy and the user @realDonaldTrump should be immediately permanently suspended from the service.

Assessment

We assessed the two Tweets referenced above under our Glorification of Violence policy, which aims to prevent the glorification of violence that could inspire others to replicate violent acts and determined that they were highly likely to encourage and inspire people to replicate the criminal acts that took place at the U.S. Capitol on January 6, 2021.

This determination is based on a number of factors, including:

• President Trump’s statement that he will not be attending the Inauguration is being received by a number of his supporters as further confirmation that the election was not legitimate and is seen as him disavowing his previous claim made via two Tweets (1, 2) by his Deputy Chief of Staff, Dan Scavino, that there would be an “orderly transition” on January 20th.

• The second Tweet may also serve as encouragement to those potentially considering violent acts that the Inauguration would be a “safe” target, as he will not be attending.

• The use of the words “American Patriots” to describe some of his supporters is also being interpreted as support for those committing violent acts at the US Capitol.

• The mention of his supporters having a “GIANT VOICE long into the future” and that “They will not be disrespected or treated unfairly in any way, shape or form!!!” is being interpreted as further indication that President Trump does not plan to facilitate an “orderly transition” and instead that he plans to continue to support, empower, and shield those who believe he won the election.

• Plans for future armed protests have already begun proliferating on and off-Twitter, including a proposed secondary attack on the US Capitol and state capitol buildings on January 17, 2021.

As such, our determination is that the two Tweets above are likely to inspire others to replicate the violent acts that took place on January 6, 2021, and that there are multiple indicators that they are being received and understood as encouragement to do so.

University Assistant Coach Fired Over Disparaging Comments

Assistant coach of the Mocs football program at University of Tennessee at Chattanooga has been fired. Chris Malone posted a disparaging, racist, and sexist tweet about Stacey Abrams, who is credited for gaining democratic votes in the tight Georgia political races.

University Chancellor Steven Angel posted a video to explain the decision. He covers the basics of an apology but deserves credit for using video as a medium in addition to the athletics director’s and head coach’s written statements:

Mark Wharton – UTC Vice Chancellor & Directory of Athletics
"Last night, a totally inappropriate social media post by a member of our football staff was brought to my attention. The entire post was appalling. The sentiments in that post do not represent the values of our football program, our Athletics department or our University. With that said, effectively immediately, that individual is no longer a part of the program."

Rusty Wright – UTC Head Football Coach
"Our football program has a clear set of standards. Those standards include respecting others. It is a message our players hear daily. It is a standard I will not waver on. What was posted on social media by a member of my staff is unacceptable and not any part of what I stand for or what Chattanooga Football stands for. Life is bigger than football and as leaders of young men, we have to set that example, first and foremost. With that said, effectively immediately, that individual is no longer a part of my staff."

Comparing the three statements demonstrates what each leader focuses on and, perhaps, their emotional reactions to Malone’s post. This situation illustrates accountability and integrity, but I might want to see more authenticity and vulnerability. Do we know more about these leaders as a result of this situation?

Zuckerberg's Message About President Trump's Account

Facebook has decided that President Trump will no longer use its platform for his messages—at least for a while. The decision came after riots at the U.S. Capitol and after Twitter and Facebook suspended the president’s account. The tech companies said that the president violated its rules by inciting violence and/or making false claims about the election.

YouTube blocked a video of President Trump expressing sympathy for the protestors and calling them “special.” The tech platforms had tried labeling posts, but the president’s false claims were still believed.

Some call this time an “inflection point": “Hey Mark Zuckerberg, @jack, @SusanWojcicki and @sundarpichai -- Donald Trump just incited a violent attack on American democracy. Is that FINALLY enough for you to act?!" At this point, Twitter has not yet permanently banned the president from tweeting.

Zuckerberg uses the indirect style for his post, with the main point in the very last sentence. He makes his argument first, and then we read the decision. It’s an interesting choice, which might not convey the courage that people would like to see.

Additional analysis and rationale for the decision are posted on the Facebook site.

CEOs Respond to Capitol Riots

Several business executives are speaking out after riots at the U.S. Capitol. Rioters stormed the building as Congress was certifying (and debating) Joe Biden as the next president. President Trump ignited the crowd by claiming, without evidence, that he won the election “by a landslide” and that it was “stolen” from him.

CEOs have been joining political conversations in the past several years, and today is another example. One of the most significant is Blackstone CEO Stephen Schwartzman, a Trump supporter and loyalist. He said, “The insurrection that followed the president’s remarks today is appalling and an affront to the democratic values we hold dear as Americans” and “There must be a peaceful transition of power.”

Bank of America CEO Brian Moynihan tweeted his view of the riots, and other leaders represented Salesorce, JPMorgan Chase, BlackRock, Google, Apple, and many more.

Political conservatives also weighed in, for example, Jay Timmons, president and chief executive of the National Association of Manufacturers. Timmons suggested that Vice President Pence invoke the 25th amendment, meaning President Trump would be removed from office:

“This is not the vision of America that manufacturers believe in and work so hard to defend. Across America today, millions of manufacturing workers are helping our nation fight the deadly pandemic that has already taken hundreds of thousands of lives. We are trying to rebuild an economy and save and rebuild lives. But none of that will matter if our leaders refuse to fend off this attack on America and our democracy.”

Riots image.

United Airlines’ Response to Passenger Death

United Airlines is doing damage control after a passenger flying from Orlando to Los Angeles was rushed to a hospital in New Orleans and died. The cause of death hasn’t yet been reported, but the airline confirmed that the passenger had Covid-19 symptoms.

Customer response is fierce, partly because the passenger’s wife told others that her husband had Covid, and partly because the airline continued to fly the plane with passengers. Like most airlines, United asks passengers about their symptoms before flying, but they do not verify.

Communications are scant. I see nothing on United’s home page but found a news release dated December 16, two days after the passenger death, titled, “United and CDC Work Together on Contact Tracing Initiative for All International and Domestic Flights.” Recent tweets mention nothing about the situation, although one conveys the same message as the news release: “comprehensive, voluntary contract tracing.”

Some might feel that this is the least the airline can do in the situation.

Robinhood's Misleading Communications

Investment app Robinhood will pay $65 million in fines for misleading customers. The 2013 start-up has grown rapidly, attracting younger, inexperienced investors with no-fee accounts and no minimums. But Robinhood generates revenue through “payment for order flow,” essentially a kickback from Wall Street firms and the same practice Bernie Madoff used to defraud investors.

Robinhood uses behavioral nudges and notifications to push users to invest in riskier stocks, resulting in higher trading volume, sometimes dramatic losses—and more revenue for the company. An NBC article describes the visuals:

When smartphone owners pull up Robinhood’s investment app, they’re greeted with a variety of dazzling touches: bursts of confetti to celebrate transactions, the price of bitcoin in neon pink and a list of popular stocks to trade.

Charles Schwab, meet Candy Crush.

A competitor compared the design to Las Vegas.

Of course, all is well when stocks go up, but when stocks decline, users have to make up the loss. For one 20-year-old man, his bill appeared to be $730,000, and he committed suicide.

Trader Joe's Criticized for "Racist Packaging"

A 17-year-old started a petition to encourage Trader Joe’s to “Remove Racist Packaging From Your Products.” Briones Bedell explains her perspective:

The grocery chain labels some of its ethnic foods with modifications of “Joe” that belies a narrative of exoticism that perpetuates harmful stereotypes. For example, “Trader Ming’s” is used to brand the chain’s Chinese food, “Arabian Joe” brands Middle Eastern foods, “Trader José” brands Mexican foods, “Trader Giotto’s” is for Italian food, and “Trader Joe San” brands their Japanese cuisine. 

She received 5,956 signatures and was aiming for 7,500.

The company responded in a series of statements, including this one:

We want to be clear: we disagree that any of these labels are racist. We do not make decisions based on petitions. 

In addition, the LA Times reported, “More than 80 of the 100-plus readers who responded to The Times’ call for opinions said the labels would not change their feelings about Trader Joe’s or its product.”

Bedell claims that her petition was a success and cites this NY Times article with a quote from a company spokesperson: “Labels such as Arabian Joe’s and Armenian Joe’s were no longer in use, and that the label Trader Joe San is currently used on only about three products.” Bedell’s latest post is titled, “Trader Joe’s Discontinues ‘Arabian Joe’ and ‘Armenian Joe’ Labels.” The NY Times article explains, “The supermarket chain said it was in the process of phasing out names, including Trader Ming’s and Trader José, that have appeared on its international food products.”

Discussion:

• What’s your view of the labels: racist, fun, or something else?

• Read Bedell’s post, Trader Joe’s statements, and the NY Times article. Can she claim credit for a decision?

• How do you assess Trader Joe’s response, particularly the statements on its website? What, if anything, should the company have done differently?

Wishing Someone Well

News outlets are reporting that President Trump wishes Ghislaine Maxwell “well.” An associate of Jeffrey Epstein, Maxwell is charged with child sex-trafficking and has pleaded not guilty.

President Trump knew Epstein and Maxwell and met them “numerous times over the years.” according to his interview with Axios. When an Axios interviewer questioned the president’s previous statement that he wishes her well, he explained what he meant:

"Her boyfriend died in jail, and people are still trying to figure out how did it happen. Was it suicide, was he killed? And I do wish her well.”

“I'm not looking for anything bad for her. I'm not looking bad [sic] for anybody.”

“I do. I wish her well.”

“I wish her well. I'd wish you well. I'd wish a lot of people well.”

Discussion:

• What does it mean to “wish” someone “well”?

• What's your view of President Trump’s comments? Appropriately empathic towards Maxwell, compassionate, insensitive towards victims of sexual abuse, polite, or something else?

• The president defended his initial comments. Should he have done so or changed his approach? Why?

Zuckerberg Testifies About 2012 Emails

Mark Zuckerberg faced one particularly tense moment during the U.S. Congressional Antitrust Hearing. Rep. Jerry Nadler (D-NY) accused Facebook of antitrust activities in its acquisition of Instagram:

“Facebook, by its own admission ... saw Instagram as a threat that could potentially siphon business away from Facebook. So rather than compete with it, Facebook bought it. This is exactly the type of anti-competitive acquisition the antitrust laws were designed to prevent.”

Nadler’s conclusion is based on 2012 emails among Zuckerberg and his staff. In one email he wrote about Instagram:

“One way of looking at this is that what we’re really buying is time. Even if some new competitors springs up, buying Instagram, Path, Foursquare, etc now will give us a year or more to integrate their dynamics before anyone can get close to their scale again. Within that time, if we incorporate the social mechanics they were using, those new products won’t get much traction since we’ll already have their mechanics deployed at scale.”

Within an hour, Zuckerberg sent a second email, which some say proves his guilt:

“I didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way.”

During the hearings, Zuckerberg defended the acquisition:

“I think the FTC had all of these documents ... and unanimously voted at the time not to challenge the acquisition. In hindsight, it probably looks obvious that Instagram would have reached the scale that it has today. But at the time, it was far from obvious.”

Discussion:

• Research and describe relevant U.S. antitrust laws.

• Read more about the 2012 emails and watch the hearings. How well did Zuckerberg defend the Instagram acquisition?

• Did Zuckerberg’s follow-up email prove his guilt? Why or why not?
  

Redskins Drop Their Name

Add The Washington Redskins to the growing list of organizations that are changing their name following the killing of George Floyd and protests around the world. The NFL team has been under pressure from fans and sponsors but, until now, has resisted changing the 87-year-old name.

Redskins owner Dan Snyder said he would never change the name, but requests could no longer be ignored from FedEx, Bank of America, PepsiCo, and Nike, the NFL’s apparel partner, which removed Redskins products from its website.

A team statement announced the decision, with no replacement name or logo yet.

Image source.

Discussion:

• Did the team do the right thing by changing the name? Why or why not?

• What are your thoughts about announcing the changing without a new name a logo? Should the team have announced both simultaneously? Why or why not?

https://www.nytimes.com/2020/07/13/sports/football/washington-redskins-new-name.html

P&G Commercials Demonstrate Empathy

Two Proctor and Gamble ads illustrate the role of empathy in understanding aspects of being Black in America. The first ad here, “The Look,” shows how a Black man experiences others’ reactions to him throughout the day. The second ad allows the viewer to watch intimate conversations that Black families have about race.

Discussion:

• How would you describe the role of empathy in addressing bias?

• What are the objectives of these ads? How well do they meet those objectives?

• What makes these ads effective—or not—in your opinion?

Analyzing the NFL's Apology

Years after NFL players “took a knee” to protest police brutality and other discrimination against Black people, NFL Commissioner Roger Goodell apologized “for not listening to NFL players earlier.” On June 5, less than two weeks after a police officer murdered George Floyd, Goodell posted a video to express his regret in handling player protests.

The response came on the heels of a video of Black NFL players saying, “What if I was George Floyd?” and asking the league to listen to its players.

Goodell’s video was introduced on NFL’s Twitter account with this statement:

“We, the NFL, condemn racism and the systematic oppression of Black People. We, the NFL, admit we were wrong for not listening to NFL players earlier and encourage all to speak out and peacefully protest. We, the NFL, believe Black Lives Matter.”

Skeptics wonder what will change in the league. Jim Litke, an Associated Press sports writer notes the lack of diversity within the NFL: “Three-quarters of the players are people of color, but just four head coaches, two general managers, and one owner, Shad Khan of the Jacksonville Jaguars, are.” Litke also points to Goodell’s shaky record of handling other “big issues,” like player concussions and domestic violence.

To that last point, this isn’t the first time Goodell apologized publicly. With a different delivery style, in a 2014 video, he said, “I got it wrong” after four players were temporarily benched for domestic violence incidents.

Discussion:

• Analyze Goodell’s video message: primary and secondary audiences, communication objectives, content, organization, etc.

• Compare this video to Goodell’s 2014 video. What differences do you notice in the delivery style? How do you explain Goodell’s strategic choices?

• What’s your view of the latest apology: genuine, placating, or something else?

• On face value, what leadership character dimensions does Goodell demonstrate? Which dimensions could Goodell display more strongly or directly?

Company Statements About George Floyd's Murder

Business Insider has assembled a list of companies’ statements and promised actions following the killing of George Floyd and the public protests.

TikTok, General Motors, McDonald’s—many brands are jumping into the conversation and posting messages that are both placating and inspiring.

Discussion:

• Read the list of statements and actions. Which sound most meaningful to you?

• Should all brands post a message? Which should, and what is important to convey?

Colleges React to Racist Posts

George Floyd’s killing has sparked protests around the world as well as backlash. A Chronicle of Higher Education article describes a few colleges acting quickly—within one day—after seeing a current or an admitted student’s racist post.

In a statement, The University of Denver condemned racist posts and announced, “The University has rescinded the student’s admission offer and they will not be attending DU.”

Some pubic universities, such as Missouri State, have published statements but are not expelling students or rescinding admission offers. President Clif Smart explains the university’s stance in a blog post.

Image source.

Discussion:

• Should universities expel students or rescind offers after finding racist posts? If so, under what circumstances?

• Should students know better—both morally and practically—than to post racist comments, memes, videos, etc.?

• Analyze and compare the two university statements. Who are the primary and secondary audiences? How well does each convey the main points, balancing various audience needs?

Facebook's Position on Twitter's Labeling

Facebook CEO Mark Zuckerberg weighed in on Twitter’s decision to fact-check and label some of President Trump’s tweets. In response to protests after the death of George Floyd, one tweet promised “when the looting starts, the shooting starts.” Twitter hid the tweet with a note that it “violated the Twitter Rules about glorifying violence.”

Another tweet claimed that “mail-in voting will lead to massive fraud and abuse,” and Twitter posted a warning to “get the facts.” Until now, Twitter had not enforced its policies for the president’s tweets.

Facebook is taking a different tack. CEO Mark Zuckerberg described the company’s position:

"I believe strongly that Facebook shouldn't be the arbiter of truth of everything that people say online. I think in general, private companies shouldn't be, especially these platform companies, shouldn't be in the position of doing that."

The Wall Street Journal editorial board defended Zuckerberg’s decision: “We wish Facebook would take a lighter touch when it comes to political speech overall.”

Image source.

Discussion:

• What’s your view of Twitter’s actions? Why do you think the company began labeling President Trump’s tweets now?

• Should Facebook follow suit? How might each company’s mission play a role in its actions?

Jenner Pays for Frye Festival Post

The U.S. Federal Trade Commission (FTC) requires that paid endorsements are not misleading. Celebrities like Kendall Jenner cannot post support on social media for a product or organization without specifying that she is being paid to do so. The FTC publishes Endorsement Guides to clarify responsibilities.

Jenner promoted the 2017 failed Frye Festival, implying that Kanye West might perform. Although she was paid $275,000, she didn’t reveal the sponsorship. She has since been sued and will pay a $90,000 settlement, which may help some of the many associates of the festival who lost money in the venture.

To learn more about what happened to the Frye Festival—a major public relations and communication failing—see documentaries on Hulu and Netflix.

Frye image source.

Discussion:

• What are the ethical implications of celebrities endorsing products?

• When a celebrity endorses a product, are you more likely to buy it?

• If you’re familiar with the festival, describe what went wrong.

A Leader Example in My Book Is Charged With Conspiracy

I was sad to see that Paul Kruse, former CEO of Blue Bell Creamery, has been charged with covering up the listeria breakout in 2015. In my book, Building Leadership Character, Kruse is a positive example of a leader who demonstrates vulnerability. His 2016 video announcing employee layoffs after the breakout was emotional and authentic.

Prosecutors say that Kruse delayed recalling tainted products, instructed employees to tell customers that product delays were caused by mechanical problems, and failed to take other appropriate action.

Blue Bell agreed to pay $19.5 million to the Department of Justice and posted a statement on its website, which focuses more on the future than on the past.

Discussion:

• Can you reconcile both perspectives of Kruse as a leader? Could he be someone who covers up listeria and someone who gets emotional when talking about employee layoffs?

• Assess the company’s statement. Who are the audiences, and what are the communication objectives?