Friday, April 13, 2007

So Don't Do That! (Jarvis)

It’s easy to grow callous over the daily scandal sheet. On this week’s critical-care list: World Bank President Paul Wolfowitz. And for shock jock Don Imus, the lights have now officially gone out.

But so what? While Wolfowitz and Imus are clearly victims of their own bad judgment, the learning for the reputation-minded can be summed up in an old Marx Brothers bit:

“Doctor, it hurts when I do this.” (Gesturing with arm.)
“So don’t do that!”

At first blush, the cases appear quite different. Radio's famous bad boy Imus was dethroned by his notoriously noxious tongue – a thoughtless joke, he says, gone terribly wrong. The Daily Show had some fun, saying Imus offered up an excuse for his remark: he doesn’t have a PR agent.

PR can’t help much once the genie is out of the bottle.

To other matters, Wolfie, as our President likes to call him, may also lose his job - in this case over more than a slip. Indeed, a series of bad decisions could send him packing.

A quick recap of the Wolfowitz case: boss gets girlfriend generous pay package and transfer. Boss claims he got approval for his actions from the ethics committee. That claim is later called into question. Boss apologies for the mistake. Board deliberates boss’ future.

Both “trust events” will cost plenty. The Imus show brought in an estimated $20 million in revenue to CBS last year. That's gone poof. And then there’s the issue of management distraction. The growing controversy at the World Bank has overshadowed major development meetings taking place this weekend. And it has also caused further turmoil among staff, who have called for Wolfowitz’s resignation.

According to the Financial Times, the scandal has jeopardized the one asset the President of the World Bank has: his credibility. Indeed, Wolfowitz has been mistrusted by many both inside and outside the bank since his appointment. All this makes it harder for the World Bank to do what it's supposed to do: fight global poverty and raise the world’s living standards.

The take from this Garage “trustmeister” is that Groucho’s advice is sound. Don’t do that. Reputational risk is real and companies need to find effective ways to mitigate poor decision-making. Large organizations are especially vulnerable to dangerously myopic judgment. What’s often missing is a zoom out lens. In other words a mechanism to help companies look out from the point of decision and understand its impact on brand reputation.

It’s a necessary practice, whether your talking about a brand, a company, a CEO, or a shock jock.

1 comment:

  1. Pete Krainik11:27 PM

    Great stuff Jarvis. I look forward to your next post.