Report Criticizes Airline Safety and Oversight

A U.S. Department of Transportation report criticizes the Federal Aviation Association and Southwest Airlines for lax safety standards. A New York Times article summarizes the report findings:

“The report found that the Federal Aviation Administration had allowed Southwest to routinely provide inaccurate data to pilots and to operate more than 150,000 flights on planes whose airworthiness had not been confirmed.

“The agency also failed to investigate concerns raised by its own representatives ‘ranging from senior executives to local inspectors’ over Southwest’s safety culture.”

The DOT includes “Four SMS Components,” the FAA’s own description to fault safety culture in both organizations.

Discussion:

• What business communication principles are illustrated in the report? Who are the primary and secondary audiences, and how well does the report meet its communication objectives?

• The report does a particularly good job of using “message titles” (also called “talking headings”). What are some examples?

• What else do you notice about the report? Consider the writing style, organization, and other features. What could be improved?

Apologies About the Iowa App

The New York Times published “everything that went wrong at the Iowa Caucases,” and it’s a long list about the app. The technology was untested and unfamiliar to volunteers, and connection problems prevented accurate data submission and reporting.

An opinion writer blamed “techno-utopianism and laziness” for the trouble: “The two fuel each other: The overarching belief that software will fix everything leads to slapdash engineering, procurement and deployment.”

Troy Price, the Iowa Democratic Party Chair, apologized for the “multiple reporting challenges.” He explains the decision to delay reporting to ensure “accuracy and integrity.”

The CEO of Shadow, the app company, also apologized:

“We sincerely regret the delay in the reporting of the results of last night's Iowa caucuses and the uncertainty it has caused to the candidates, their campaigns, and Democratic caucus-goers. As the Iowa Democratic Party has confirmed, the underlying data and collection process via Shadow's mobile caucus app was sound and accurate, but our process to transmit that caucus results data generated via the app to the IDP was not. Importantly, this issue did not affect the underlying caucus results data. We worked as quickly as possible overnight to resolve this issue, and the IDP has worked diligently to verify results. Shadow is an independent, for-profit technology company that contracted with the Iowa Democratic Party to build a caucus reporting mobile app, which was optional for local officials to use. The goal of the app was to ensure accuracy in a complex reporting process. We will apply the lessons learned in the future, and have already corrected the underlying technology issue. We take these issues very seriously, and are committed to improving and evolving to support the Democratic Party's goal of modernizing its election processes."

Discussion:

• Analyze each of these apologies: the audiences, communication objectives, writing style, organization, delivery choice, etc. Each message has distinct purposes.

• What works well in these statements, and what could be improved?

Wells Fargo Former CEO Banned

In what the Wall Street Journal calls “unprecedented” and “an extraordinary sanction for a top executive at a large bank,” former CEO John Stumpf has been barred from the banking industry. The decision—and a $17.5 million fine—were part of a settlement between Stumpf and the Office of the Comptroller of the Currency (OCC) for millions of fake bank accounts created at Wells Fargo.

The OCC concluded that Stumpf should have known of the systemic problems and that “there was a culture in the Community Bank that resulted in systemic violations of laws and regulations.” When the scandal became public, employees complained of extreme stress because of pressure to sell more bank products. This pressure led employees to create fake accounts for customers.

Other Wells Fargo executives have been fined and charged, but none have been banned from the industry.

Image source.

Discussion:

• Do you think the decision is fair? Why or why not?

• This decision represents a shift from the 2008/2009 financial crisis, when banks paid significant fines but very few individuals were charged. What’s your view of the change?

Communications About Kobe Bryant

NBA superstar Kobe Bryant, his daughter, and seven others died in a helicopter crash, and many are mourning the loss. At the Emmy’s, celebrities paid tribute to his life, and the NBA postponed a Lakers—Clippers game.

The helicopter company, Sikorsky, owned by Lockheed Martin, posted two tweets and a short statement on its website:

We extend our sincerest condolences to all those affected by the January 26th Sikorsky S-76B accident in Calabasas, California. We have been in contact with the NTSB and stand ready to provide assistance and support to the investigative authorities and our customer.  Safety is our top priority; if there are any actionable findings from the investigation, we will inform our S-76 customers.

Discussion:

• Analyze the Sikorsky messages. Who are their primary and secondary audiences? What are the communication objectives, and how well did the company achieve them?

• Have you seen other communications from Sikorsky? Should the company do or say more? If so, what?

Carlos Ghosn's News Conference

Former head of Nissan Motor Co. and Renault SA Carlos Ghosn delivered a news conference from Lebanon after his escape from Japan. Ghosn was arrested in Tokyo in 2018 for misreporting income and misusing company funds. He left through a well-orchestrated exit in a box by private plane to his home country.

In what the Guardian calls “a lengthy and often rambling press conference in Beirut,” Ghosn spoke in four languages to defend himself. He criticized the Japanese criminal justice system and accused the Japanese government of working with Nissan executives to conspire against him.

Ghosn was adamant about his innocence:

“I don’t consider myself as a prisoner in Lebanon. I prefer this prison to the one before. I am ready to stay a long time in Lebanon, but I am going to fight because I have to clear my name.”

The Japan Times reports that the new conference “will have done little to turn the tide of public opinion in Japan and restore his reputation, which has been tainted by his alleged financial wrongdoing.” A former prosecutor in Japan said, “Ghosn didn’t have anything substantive to say. If he wants to restore trust, he shouldn’t do a self-absorbed speech like he did, but he should calmly make specific explanations and present evidence supporting those explanations.”

Discussion:

• Watch parts of the news conference. How well does Ghosn restore his image and prove his innocence?

• How should Ghosn communicate differently if he wants better outcomes?

Wells Fargo Earnings Call

The Wells Fargo scandal of creating fake accounts became public in 2016, and the company is still suffering the repercussions. Profit is down 53%, and stock performance is lagging.

On an earnings call, Charles Scharf, who has been the CEO since October 2019, explained the bank’s current position:

I was honored to be chosen to lead Wells Fargo because I believe this is an extraordinary company that plays an important role in this country. We came out of the financial crisis as the most valuable and most respected bank in the US, but as you know, we made some terrible mistakes and have not effectively addressed our shortcomings. These circumstances have led to financial underperformance, but we have one of the most enviable financial services franchises in the world and employees that want to do what's necessary to again be one of the most respected and successful banks in the US.

Discussion:

• Read the earnings call transcript. What’s your view of how Scharf and John R. Shrewsberry, EVP and CFO, addressed concerns?

• How well has the bank recovered its image since 2016? What examples of their communications can you cite?

• What could bank executives have done differently in the past four years?

• How well does the line chart work to compare Wells to other leading banks? What could be improved?

Boeing Internal Documents Don't Reflect Well on Safety

The lead article in today’s The Wall Street Journal is titled, “Internal Boeing Documents Show Cavalier Attitude to Safety.” In 150 pages of emails and other documentation, employees worry that they don’t have enough time to correct safety issues and refer to regulators as “morons” and “stupider.”

In February 2018, one employee wrote, “Would you put your family on a MAX simulator trained aircraft? I wouldn’t.” A pilot wrote, “I still haven’t been forgiven by god for the covering up I did last year. Can’t do it one more time. Pearly gates will be closed.” Still another employee wrote, “This airplane is designed by clowns, who in turn are supervised by monkeys.”

A defense attorney argues that employees were just “blowing off steam” in their emails.

In the past few months, Boeing’s culture has come to light—once lauded as a place where people felt proud to work but now a place where people feel stressed and remorseful. CEO Doug Muilenberg has since been terminated and replaced temporarily by CFO Doug Smith.

Image source.

Discussion:

• Read more about the internal communications. What lessons can employees and their managers take away from this story?

• What’s your view of the emails? Do they indicate big problems at the company, or is the attorney right that employees are just venting to each other? How does the concept of “cherry picking” come into play?

• What should Boeing do to manage this situation? Consider this news in light of the company’s crisis communication planning you read about in another post.

Facebook Memo Goes Public

Facebook executive Andrew Bosworth wrote a 2,551-word memo about the company’s role in the upcoming election and more. Bosworth compliments President Trump’s use of Facebook ads and admits that the site impacted the 2016 U.S. election. A Vox article describes Boswell’s logic:

Bosworth’s memo has much more in there, which is getting plenty of deserved attention, including the assertion that Facebook did indeed help Donald Trump win the 2016 election — by giving him the tools to run “the single best digital ad campaign I’ve ever seen from any advertiser. Period.” And the memo also reveals that Bosworth, a self-described “committed liberal,” fantasizes about using Facebook to prevent Trump from winning in 2020, but won’t.

The memo is also attracting attention because Bosworth compares Facebook to sugar and places responsibility on the user: “At the end of the day we are forced to ask what responsibility individuals have for themselves."

Bosworth ends the memo with a question:

To bring this uncharacteristically long and winding essay full circle, I wanted to start a discussion about what lessons people are taking away from the press coverage. My takeaway is that we were late on data security, misinformation, and foreign interference. We need to get ahead of polarization and algorithmic transparency. What are the other big topics people are seeing and where are we on those?

Boswell image source.

Discussion:

• Read the entire memo . What surprises you most?

• How damaging is the memo to Facebook’s image, particularly with another election coming up? How does a memo like this—posted on an internal site—become public?

• What business writing principles does Bosworth follow, and how could he improve the memo?

Boeing's Crisis Communication Plan

During the holiday break, several news items about Boeing were relevant to business communication and character. In one article, the New York Times revealed internal Boeing documents showing a company trying to rebuild its image after two MAX crashes within a year..

The documents give us an inside view of how the company plans to use persuasive strategies to win back customers. In one graphic, we see customers’ willingness to fly. In another, we see customer concerns and ways Boeing can address them, for example, with FAQ cards, “pilot confidence videos,” or personal connections (for example, “Flight attendant offers comfort and information on the safety of the MAX”).

Discussion:

• What persuasive strategies does the company plan? Try to find examples of logical argument, emotional appeal, and credibility.

• What are the consequences of this information becoming public? Does it likely endear the public to the company’s concerns, embarrass the company, or something else?

Accountability in the News

Two situations this week remind us that CEOs should take accountability for mistakes in their companies.

On an investor call, Home Depot CEO Craig Menear said retail theft is on the rise:

“This is happening everywhere in retail. We think this ties to the opioid crisis, but we’re not positive about that.”

Menear faced criticism on Twitter for blaming the opioid crisis rather than taking responsibility for product loss at a warehouse.

On another call, Costco CFO Richard Galanti talked about losses because of a website crash:

"It was unfortunate. Despite all the efforts to have plenty of processing capacity, if you will, there was something that occurred." He also acknowledged, “[W]e did leave something on the table.”

In both situations, the executives could be more direct.

Discussion:

• Do you agree with my assessment? Why or why not?

• What evidence should Costco provide to back up its claim?

• What else could the executives have said differently? (Hint: Note Galanti’s use of passive voice.)

• In addition to accountability, what leadership character dimensions are illustrated by these examples?

JPMorgan Recorded Phone Conversation

Jimmy Kennedy, an African-American former National Football League player, tried to open a private wealth account at JPMorgan but had trouble getting attention. He recorded a conversation with an African-American employee, Richardo Peters, who said, “You’re bigger than the average person, period. And you’re also an African-American. We’re in Arizona. I don’t have to tell you about what the demographics are in Arizona. They don’t see people like you a lot.”

In a New York Times article that published the recording, Peters recounted a specific example of discrimination against a Black customer. When he was trying to bring on another new client, who had received a large settlement, his manager said, “You’ve got somebody who’s coming from Section 8, never had a nickel to spend, and now she’s got $400,000, What do you think’s going to happen with that money? It’s gone.” His manager’s position was that the customer would not invest money with the bank.

Other incidents at the bank led to Peters’ termination, and he is suing for racial discrimination. JPMorgan also recently settled a class-action lawsuit for $24 million to Black employees who claimed discrimination: according to a New York Times report, “in some cases by isolating them from colleagues and dumping them in poorer branches.”

A few days later, CEO Jamie Dimon addressed the situation in a memo to employees.

Discussion:

• How do you assess this situation at JPMorgan? Read more in the NYT article.

• A February Essence article describes and praises JPMorgan’s Advancing Black Pathways program to support the Black community. What’s your view of the effort in light of this news?

• How do you assess CEO Jamie Dimon’s response in the memo? We don’t see the entire memo, but CNBC posted quotes.

Should We Call Climate Change Something Else?

An AdAge writer wonders whether renaming climate change would change perceptions. Reframing is a common strategy for influencing behaviors, thoughts, and feelings. Already, climate change seems to be the evolution of global warming, a less convincing idea, in part, because sometimes it’s quite cold, as President Trump says.

A brand team pondered the following new names:

• Global Meltdown, Global Melting

• Climate Collapse, Climate Chaos

• Boiling Point, Melting Point

• Scorched Earth

Earth image source.

Discussion:

• The author identifies “parameters and guideposts” for the new name: audience, reach, and message. What is important for each of these categories?

• What’s your view of the proposed new names? Which do you like best and least, and why?

Communications Criticized at Syracuse University

A Chronicle of Higher Education article says that communications at Syracuse University “didn’t help” the racial issues. In the past few weeks, videos, slurs, and drawings, such as swastikas, culminated in a rumor that a “white-supremacist manifesto” was sent to students’ phones. The manifesto was said to be a copy of the one associated with the March New Zealand shootings, and Chancellor Kent D. Syverud responded, “It was apparent that this rumor was probably a hoax, but that reality was not communicated clearly and rapidly enough to get ahead of escalating anxiety.”

The response didn’t address student concerns, which have been bubbling for years. Syverud was criticized for his response in 2014 during campus protests about climate. To the recent racist incidents, students are demanding quicker and more direct action. The chancellor’s choice of words is also at issue, as expressed by Mona Lisa Faz, a graduate student of communications:

“Since when did calling someone the n-word or creating a swastika in the snow ever count as bias?” she wrote in an email to The Chronicle. She called Syverud’s response “a whitewashing and playing down of what is really happening. I get you don’t want to alarm people, but I’m a Latina, and when you play down a hate crime, THAT is alarming to me and my community.”

The University is trying to catch up, posting a chart showing students’ demands and actions taken.

Notes image source.
Protest image source.

Discussion:

• Read more about the Syracuse University situation. What were the administration’s major missteps? How can they best recover now?

• What’s your view of the chart? What works well about this approach, and how might it fall short?

• Some are calling for the chancellor to resign. Should he? Why or why not?

• What leadership character dimensions are illustrated by this situation?

Prince Andrew's BBC Interview Does Not Go Well

Prince Andrew took a BBC interview to explain his relationship with Jeffrey Epstein, who had served prison time for having sex with a minor. The Duke of York spent a night at Epstein’s mansion, which some victims called a ”House of Horrors.” The Duke is shown in photographs, along with photos of young women coming into and leaving the house. One woman claims that, when she was 17, she was forced to have sex with Prince Andrew. Since that time, Epstein committed suicide in jail, where he was facing sex trafficking charges.

Prince Andrew told the BBC interviewer, “I kick myself for on a daily basis because it was not something that was becoming of a member of the Royal Family and we try and uphold the highest standards and practices and I let the side down, simple as that."

When asked about his stay at the mansion, Prince Andrew replied, "It was a convenient place to stay. I mean I've gone through this in my mind so many times. At the end of the day, with a benefit of all the hindsight that one can have, it was definitely the wrong thing to do. But at the time I felt it was the honourable and right thing to do and I admit fully that my judgement was probably coloured by my tendency to be too honourable but that's just the way it is."

He also referred to Epstein’s behavior as unbecoming: “Do I regret the fact that he has quite obviously conducted himself in a manner unbecoming? Yes.” When questioned, he said, “I’m sorry. I’m being polite. I mean in the sense that he was a sex offender.”

Responses to the interview have been negative. Since the interview, AON, Cisco, KMPG, and a British charity have removed or are considering removing their brand affiliations with the prince’s name and his work.

Prince Andrew has since tweeted his sympathy and decision to “step back from public duties for the foreseeable future.”

Discussion:

• Describe the arguments for and against Prince Andrew’s decision to take the BBC interview.

• Looking at the BBC interview, do you think he could have handled the situation better? What could he have done differently?

• Analyze the prince’s tweet. What’s your view of that decision and communication? How well is the prince managing the fallout?

• What leadership character dimensions are illustrated by this situation?

Fabricated Letters to the SEC

The U.S. Securities and Exchange Commission is planning a policy change that, as a Bloomberg article describes, “would shift power from investors to corporate boards” and “limit[s] the power of dissenting shareholders.” Unfortunately, when Chairman Jay Clayton announced the change, he cited several fabricated letters of support to the SEC.

The SEC failed to recognize that many letters followed a similar template and included a random line in the mailing address—“A Coalition of Growth Companies.”

Clayton was impressed that the SEC heard from such a variety of people, such as veterans and retired police officers, but people contacted said they didn’t write the letter or agreed to having their name on a letter without understanding the implications.

The Bloomberg article reports Clayton’s response:

The SEC declined to comment on any irregularities with the letters. In a Tuesday interview, Clayton sidestepped a question about how the agency ensures comment letters are genuine. He did emphasize that the regulator’s potential revamp of shareholder voting rules are proposals, adding that there will be ample time for people on both sides to weigh in before any changes are finalized.

“We welcome input in all ways,” Clayton said in the interview with Bloomberg Television’s David Westin. “On this issue, where there are a lot of different views and a lot of different interests, we encourage people to come in and talk to us, send us their comments.”

Discussion:

• How does something like this happen? Who is responsible?

• Assess Clayton’s response. How well is he handling the situation? What, if anything, should he do differently?

• What leadership character dimensions are illustrated by this situation?

Microsoft's Diversity and Inclusion Report

Microsoft’s 2019 Diversity and Inclusion report is the company’s sixth since 2014.

In the introductory letter, we learn about positive changes in demographic data:

In technical roles alone, we have 49% more women, 48% more Hispanic/Latinx, and 67% more African American/Black employees than we did three years ago. And beyond population growth, this year’s snapshot shows diversity representation has risen in every demographic category we track.

The report includes a few dazzling graphics, such as the one shown here.

Discussion:

• Read the entire report. What principles of business communication are followed?

• What suggestions for improvement would you suggest to the report authors?

• What’s your view of the graphic shown here? What is the main point? How else could the data be shown?

• Although the report writers acknowledge that some of the diversity increase in technical roles is attributed to employee growth, what other questions might a skeptic ask?

SoftBank's Vague WeWork Slides

SoftBank already took a financial hit because of its investment in WeWork. Now, the company is facing criticism about its data analysis and presentation.

A deck SoftBank Group (SBG) used to justify its WeWork investment includes several “hypothetical” and vague slides, like this one.

If you’re having trouble reading the footnote, here it is:

This hypothetical illustration is provided solely for illustrative purposes, reflects the current beliefs of SBG as of the date hereof, and is based on a variety of assumptions and estimates about, among others, future operating results, the value of assets and market conditions at the time of disposition, any related transaction costs and the timing and manner of sale, all of which may differ from the assumptions on which this hypothetical illustration is based. There are numerous factors related to the markets in general or the implementation of any specific operational plan that cannot be fully accounted for with respect to the hypothetical illustration herein. Any targets or estimates are therefore subject to a number of important risks, qualifications, limitations, and exceptions that could materially and adversely affect the hypothetical illustration presented herein. Accordingly, actual results may differ materially from the hypothetical illustration presented herein. For the avoidance of doubt, this illustration does not reflect actual results or metrics from the company.

The slide title is also odd: the illustration isn’t hypothetical, but the profitability is.

Discussion:

• How might this chart affect SoftBank’s credibility?

• What other examples in the SoftBank deck are problematic?

• What leadership character dimensions are illustrated by this situation?

EY's Training Program Considered Sexist

Ernst & Young delivered a training program for female executives about a year ago, and it’s coming back to bite them. Critics say the program was sexist and cite the following as an example:

In the session in question, attendees were told be “polished,” have a “good haircut, manicured nails, well-cut attire that complements your body type,” it states on Page 36 of the 55-page handout. But that’s followed by a warning: “Don’t flaunt your body―sexuality scrambles the mind (for men and women).”

The criticism became public because a former partner is suing the firm for harassment.

In response, EY said, “Any isolated aspects are taken wholly out of context,” and that the program received positive evaluations. They did, however, say the program “is no longer offered in its current form.” The company also issued this statement:

“We are proud of our long-standing commitment to women and deeply committed to creating and fostering an environment of inclusivity and belonging at EY, anything that suggests the contrary is 100% false.”

Discussion:

• Read the former partner’s letter to EY. What are her strongest and weakest arguments? What is your overall reaction to the letter?

• What’s your view of the company’s response?

• What leadership character dimensions are illustrated by this situation?

Boeing CEO Responds to Questions

This week, Boeing CEO Dennis Muilenburg answered lawmakers’ questions about the two Max 737 plane crashes in the past year. Facing families of deceased passengers, Muilenburg began his testimony with an apology:

“I’d like to begin by expressing my deepest sympathies to the families and loved ones of those who were lost in the Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents, including those who are here in the room today. I wanted to let you know, on behalf of myself and all of the men and women of Boeing, how deeply sorry I am. As we observe today the solemn anniversary of the loss of Lion Air Flight 610, please know that we carry the memory of these accidents, and of your loved ones, with us every day. They will never be forgotten, and these tragedies will continue to drive us to do everything we can to make our airplanes and our industry safer.”

One of the most tense moments was when Senator Ted Cruz questioned Muilenburg (see video). Muilenburg also faced criticism as he was leaving. The mother of a victim of the second crash responded to his invoking his Iowa farm background:

“Go back to Iowa. Do that.” She also said, “I don't feel like you understand. It's come to the point where you're not the person anymore to solve the situation."

Discussion:

• Watch more of Muilenburg’s testimony. What are some examples of questions he addressed well, and how could he have done better?

• How well does Muilenburg balance emotional appeals, logical arguments, and credibility in his testimony?

• What leadership character dimensions are illustrated by this situation and by Muilenburg’s testimony?

• Muilenburg’s interaction with the mother is a difficult situation for anyone to handle, and we can certainly understand her grief and anger. How would you have responded?

  CNN reports:

  “In response, Muilenburg said he respects her viewpoint. "But I want to tell you the way I was brought up. And I'm just being honest here about it. I learned from my father in Iowa ... when things happen on your watch you have to own them and you have to take responsibility for fixing them," he said.

Astros Executive Fired After Yelling at Female Reporters

Brandon Taubman, assistant manager of the Houston Astros baseball team, was fired after comments made to female reporters. The situation became more complicated because the team, at first, criticized a Sports Illustrated reporter, Stephanie Apstein, and called her article, “misleading and irresponsible” and a “fabrication.”

In the team club house, after a game, Taubman yelled at the female reporters, “Thank God we got Osuna. I’m so f------ glad we got Osuna!” The MLB suspended Osuna for 75 games because of a domestic violence charge, and the Astros took a PR risk in hiring him. A Sports Illustrated writer criticizes the team’s decision:

But in truth, the Astros' front office acts as if it is tired of being yelled at about this subject. They want to be allowed to play their baseball games and pop their champagne without being forced to think about anything that happened away from the ballpark.

The team’s first response of defending Taubman didn’t stick. They later issued a statement apologizing to both the group of female reporters and Apstein.

Ernst & Young is scrubbing its website of ties to Taubman, who worked for the firm. EY is facing its own trouble following criticism about a training program for women.

Taubman image source.

Discussion:

• What’s your view of the situation—both Taubman’s outburst and the Astros’ response?

• Analyze the team’s statement. What leadership character dimensions does this illustrate, and how does it fall short? What could be improved?

• Did EY do the right thing by trying to disassociate with Taubman? Why or why not?