When 10% failure is way too much

The recent Parliamentary Committee Hearings into the big four banks may have been considered a ‘damp squib’ by those calling for even greater public accountability but it did force some interesting admissions from the bank bosses.

There was a standard and expected amount of mea culpa and contrition in evidence but one form of words could come back to haunt Ian Narev, the CBA boss. Here’s a transcript of an exchange on the quality of financial advice provided to customers:

Narev is asked by Coleman (Committee Chair Liberal MP David Coleman) about the financial advice scandals.

He acknowledges the bank failed to act with “requisite speed” to protect customers, although only about 10 per cent of the 8000 people whose files were reviewed were found to have been given faulty advice.

Whilst Mr. Narev was being as honest as he could it is hardly reassuring to hear that if you seek advice from the ‘experts’ at CBA there is a 10%, or possibly even higher, chance that you will be put wrong and suffer a financial loss. They don’t advertise for business by saying ‘we get it right, most of the time’.

Again, words really do matter and even with the most thorough preparation (which we are sure CBA undertook) they can come across quite differently to the audience from the intent of the speaker.

Narcissism and leadership

A sub-optimal combination or How words and actions betray the self-obsessed

Irrespective of one’s political leanings, or view of the desirability of a second Clinton Presidency, the one thing that the current USA Presidential campaign is making very clear is that even in the age of self-obsession voters soon tire of obvious narcissists.

Someone needs to tell Donald Drumpf (yes, that is the original family name) that ‘leadership is not all about you’. As The Donald’s unravelling campaign demonstrates, people want leaders to be all about the concerns of the populace not the projection and protection of the candidate’s ego. So, no Donald, it’s not all about you, just as it was never, in our own example, all about Kevin, nor is it still.

The particularly disappointing thing about the Trump campaign is that it is so bad that it allows the Clinton campaign to do nothing other than say – ‘ well you can’t let him into the Whitehouse’. Policy discussion has not just taken a back-seat, it has been left at the curb.

The cult of personality is a shallow and lazy way to pick leaders. Perhaps the Trump candidacy, fed as it has been by the media new and old, will finally demonstrate that there needs to be some focus on more than grubby political blood sport. Yes, nasty narcissists have been, and still are, elected. However, ultimately, all have failed to be leaders of any quality and reputation. The shame of it is the damage done on the way through.

There has certainly been no shortage of such characters in the world of commerce.

What does all this tell business? Well, apart from driving more disillusionment with the political process, the lesson on leadership is plain. Words matter, a lot. Actions matter, even more and attitude matters, the most.

And, right on cue, up pops another example of actions not matching words.

When the, for now, CEO of Wells Fargo, John Stumph, faced a Congressional Hearing on the issue of the bank opening over 1 million accounts without customer’s knowledge – and charging them for the privilege- he claimed that the buck stopped with him. What he did, though, was to blame the 3,500 low level staff he fired for the breach (but only after regulators found out the bank was engaged in the massive fraud).

Senator Elizabeth Warren didn’t let him off lightly. She pointed out that he had not suffered one cent of penalty (he is paid over US$20 Million in salary and bonuses per year) and that not one senior executive had resigned or been fired. That, she scolded him, showed a total lack of accountability. Now he is unlikely to hold his job much longer and the bank’s board has ordered him to pay back $41 Million in bonuses and stock options.

Leadership is having and demonstrating the right attitude, saying the right words and matching them with the right actions. Egomaniacal rants about how “I alone can fix this”, ego insecurity that demands vicious and venal retorts to real and imagined slights and demeaning, disrespectful behaviour to ‘friend’ and foe alike, are not the marks of a truly successful and respected business leader. We can only hope that they prove to be just as unsuccessful in modern democracies.

RMK+A is highly experienced in assisting senior executives and CEO’s with strategic communications, including key message development and all aspects of stakeholder engagement.

Three Epic Fails In Maintaining Trust

What do statisticians, one of the world’s largest car companies and the NSW Police have in common?

They all, in varying ways, have managed to create for themselves the most difficult environment for ongoing stakeholder engagement. One of little to no trust.

The 2016 Census

The Australian Bureau of Statistics is so comprehensive a failure that a War & Peace sized tome could be required to detail just how many mistakes were piled upon mistakes. However, at the core of the debacle was the arrogant belief that ‘of course everyone trusts us’ and ‘our systems are inviolate.’ Wrong on both counts. Trying to sneak a change of privacy rules on the public with a press release and expecting no pushback is just naive. In an environment of increased awareness of online data privacy it really is adhering to Jeremy Clarkson’s famously sarcastic protestation of “what could possibly go wrong?”

Then to try justifying the privacy rule change by claiming the people provide more information on social media platforms forgets the basic difference that, if they do so, people share that information by choice, not by stealthily enacted bureaucratic fiat.

The arrogance that led to the Census site crash and the confusion of message after the almost inevitable calamity occurred (that some may say they almost goaded hackers into delivering) was the sort of slow-motion train wreck of failed communication that was as predictable as it was cringe-worthy. 

VW and Motoring Media

Speaking of arrogance: Volkswagen. The diesel emissions cheating scandal has been running for over 12 months. Still VW seems either unwilling or incapable of finding a way to engage sensibly with its most important stakeholders in any effort to rebuild its shattered reputation.

The latest stroke of PR genius was an official statement from VW Australia refusing to participate in the now well established Australia’s Best Cars awards run by the journalists of the combined state-based Auto Clubs, under the AAA umbrella. A nation-wide group of clubs that represent over 7 million Australian members. Really?

Here is what they said under the name of their local MD, (I’m not making this up).

“The AAA’s public statements inspire little confidence in its grasp of fundamental issues,” Mr Bartsch said. “Moreover, the AAA has become hostile not only to our brands, but to the motor vehicle industry that employs tens of thousands of Australians.”

It is bizarre that this petulant and arrogant tit-for-tat is seen by VW as a valid corporate response to the AAA’ disqualification of VW group vehicles form the 2015 awards, just as the diesel-gate scandal was at its high-point.

Never mind that if only 10% of the AAA members read resulting negative commentary in the Club’s various monthly journals that is another 700,000 consumers who have ‘opinion leaders’ telling them VW is a poor corporate citizen.

NSW Police and the Lindt Siege Inquest

If there is one organization that relies on public trust almost more than any other, it is the Police. We see what happens when that trust is shattered. The USA appears trapped in an endless cycle of mutual distrust and aggression between their Police forces and the black population.

The NSW Police, for some reason, appear to expect, if not demand, public trust without wishing to be too publically accountable. They spent a good part of 2015 engaged in ugly internal power struggles, played out very publicly in the Parliamentary Enquiry into Internal Affairs bugging of, now senior, police back in the late 1990s.

Now they top that mess with uncoordinated and frankly concerning statements about the chain of command (or lack of) in relation to the Lind Siege and the resulting loss of two civilian lives.

The public could be forgiven for asking ‘who is running this s*#t-show’?

Once again there has been no obvious concern for how the sight of senior leadership ducking for cover will play with their key stakeholders and what long-term reputational damage is being done. Perhaps that is a side effect of lengthy tenure and comfortable retirement provisions?

 

All three examples have not only damaged the reputation of the organisations involved but also created a stakeholder trust deficit that will be very hard to correct.

The first step in regaining any degree of trust is an understanding that there must be an acknowledgment of fault, together with a recognition that a great deal of hard work will need to done to earn that trust back. So far all three show no real sign of that basic understanding.

For now, at least, they serve the purpose of offering clear examples of how not to manage stakeholder relations. However, the really concerning trend is that, even with all that we now know about effective stakeholder management, such monumental mistakes just keep happening.

How I Learned To Stop Worrying And Love Engagement

2  The Issue Of Trust

A few years ago I came close to losing faith in the discipline of communications. Problems arose that our hitherto powerful comms methods seemed unable to address. How come? We had the messages, we had the reach and the frequency.

Unfortunately we had lost the trust.

Working in government comms for over 20 years it’s easy to forget about trust. Generally, people trust government departments and agencies (politicians still have a problem, of course).

Even in these cynical times, the vast majority of Australians don’t believe the conspiracy theories about fluoridating water or monitoring people’s data. Even the biggest conspiracy theory of all regarding climate change seems in the process of abandonment by all but the most committed deniers.

Nonetheless, government can lose the trust of the community when it’s seen to be implementing a controversial policy, or looks confused, disorganized or lazy. In my own Road to Damascus experience, government was seen to be wrong-headed, high handed and invasive. After 12 months of this there was very little trust left.

What I learned from this situation is that sometimes you have to acknowledge that your comms isn’t going to be enough, stop trying to persuade people and start engaging with them.

Since then I’ve been trained in engagement techniques, which I’ve used in a variety of situations. I now see comms and engagement related, and complementary in many ways, but as coming from very different places.

Communications – at least as I was taught it 20 years or so ago – works from the premise that the communicator acts on a target audience. The basis of engagement, on the other hand, is about working with the stakeholders.

Once I started thinking along these lines, it really struck me that communications was somewhat warlike – think of the language – ‘target audiences’, ‘campaigns’, ‘strategy’, ‘penetration’, ‘hits’. We’re not such a violent lot really, but I think communications is in the business of seeking power over people – their knowledge, their attitudes, their choices – by firing off our messages at them. Certainly those of us in government are doing this for the greater good.

On the other hand, with engagement we start from the position that we don’t have a monopoly of truth or moral authority. We have stuff to bring, you have stuff to bring; let’s both bring our stuff and see what we can achieve.

History – even fairly recent – suggests that government could once get its way because it was ‘the expert’, it had the power, and it was perceived by the community to have a mandate – and the community by and large felt it had to accept what it did.

That era is over, and governments now have to accept that they too need social license to operate.

Communications is still powerful and hopefully, for government, a powerful force for good, but it only works when the trust is there. When trust is lost, comms loses its mojo and becomes just words. And that’s where engagement comes in.