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?

Lysol Disputes Claims of Cure

During his press conference, President Trump questioned whether disinfectants could be used internally to fight the new coronavirus:

“I see the disinfectant that knocks it out in a minute, one minute. And is there a way we can do something like that by injection inside, or almost a cleaning? Because you see it gets inside the lungs and it does a tremendous number on the lungs, so it would be interesting to check that.”

The president later said, “I was asking a question sarcastically to reporters like you just to see what would happen.” But Lysol executives are concerned that people may take the idea seriously and try to treat themselves. Reckitt Benckiser, which makes Lysol products, issued a statement, “Improper Use of Disinfectants.”

Lysol image source.

Discussion:

• Watch the president’s comment during the press conference. What’s your view of his speculation?

• Analyze the Lysol maker’s response. What works well, and what could be improved? What is appropriate or inappropriate for a brand’s parent to dispute the president’s claim in this way?

Improving Column Charts

So many charts about COVID-19 could be improved. Here’s one from a Business Insider article, which compares death rates for the flu and COVID-19.

Discussion:

• What issues do you see in the graphic? (Hint: Check the x axis, and describe what the percentage on the y axis represents.) How would you fix the problems?

• What are the consequences of designing charts in this way?

• Find another recent chart to analyze. In what ways does the graphic convey information accurately, and how does it fall short?

Misleading NY Covid-19 Chart

Thanks to Carl Quintanilla for posting this example of a misleading chart. New York Governor Andrew Cuomo has been lauded for his leadership during the coronavirus crisis, yet critics say one of the mainstay charts in his news conferences shows a skewed story.

When he shows this chart, Governor Cuomo describes, the decreasing numbers of new hospitalizations. The chart title is clear: “Change in Total Hospitalizations.” But what does the visual imply?

Similarly, he shows “Change in ICU Admissions” (approx.00:35 in the video).

Discussion:

• Watch the first minute of the news conference. Is he clear, or could he be clearer in his explanation?

• What’s your view of the two charts? Are they misleading? What are the possible consequences of showing the data in a misleading way?

• How, if at all, should these charts be changed?

Luckin COO Fabricated Sales Data

Luckin’ Coffee, China’s largest coffee chain, is suffering the consequences of publishing false sales numbers. Ernst & Young discovered the misconduct, which took place in 2019, during an audit, concluding that “management personnel engaged in fabricated transactions which led to the inflation of the Company’s income, costs and expenses.” An investigation blames the chief operating officer and others.

A report details “the fraud and the fundamentally broken business,” including “smoking gun” evidence and “red flags.” The anonymous authors compare video recordings of store foot traffic to reported sales.

In response to the news, Luckin’s stock declined between 75 and 80%. Starting in February, when the anonymous report was made public, the company has been posting notices about the situation on its website.

Discussion:

• Analyze the anonymous report, including the audiences, objectives, organization, writing style, etc. What works well, and how would suggest that the writer improve the report?

• How well did the company address concerns? Begin with the first response in February.

• What leadership character dimensions does this situation illustrate?

Does Persuasion by Scarcity Work?

Business communication students may learn about Robert Cialdini’s Six Principles of Persuasion, including scarcity. For example, a online retailer indicates “Only two left!” or “Only one left at this price!”

In a Wall Street Journal article, a researcher questions whether the “quantity scarcity” strategy works under all conditions. Dr. Christopher Tang explains new research:

“…scarcity messages work best with time-sensitive and perishable products such as hotel rooms or plane tickets, as well as unique items like collectibles or limited editions.

“They are less effective with durable goods such as home-improvement products or kitchenware, in part because they can give shoppers the impression that the product is being pushed because it is undesirable, lower quality, obsolete or discontinued. And in the case of items typically bought in larger quantities, such as partyware, lightbulbs and batteries, we found that scarcity messages can actually hurt sales by making shoppers believe they won’t be able to buy as much of a product as they want.”

To use the scarcity principle effectively, Dr. Tang suggests that retailers highlight quality, promote urgency, and offer product bundles

Discussion:

• When have you seen the quantity scarcity at work? Did it persuade you to purchase something?

• Think of a specific product that you might buy. How would you recommend that retailers use this strategy effectively to move remaining products?

WHO Official Bungles Interview

World Health Organization (WHO) senior adviser Bruce Alyward wanted to avoid a reporter’s question about Taiwan becoming a member of the organization. A video of the interview shows an awkward exchange, with Alyward remaining silent (but we still see him moving and hear sounds), saying “Sorry, I couldn’t hear your question,” asking the reporter to move onto another question, and then, finally, ending the call. During a follow-up call, Alyward refers to China and then abruptly ends the call.

Taiwan has had good success in controlling COVID-19, and the government claims to have warned the WHO back in December 2019 about the contagion.

As of today, Alyward’s name is removed from WHO’s website listing advisers to the organization.

Discussion:

• What is a better way for Alyward to have handled the reporter’s question?

• Why do you think the WHO ignored warnings from the Taiwanese government?

Starbucks Communication

The Starbucks website has been updated regularly with news about the company’s response to COVID-19. Near the top of the page is a link to “At-a-glance: What customers need to know about Starbucks response to COVID-19.”

The big news is that stores will offer only drive-thru service for the next two weeks. In a letter to Starbucks partners (employees), the company promised 30 days of pay whether they work or not.

Discussion:

• Analyze both the public website and the letter to partners. Describe the audiences and communication objectives of each.

• What organizational structure is used for these bad-news messages?

• What does Starbucks do well in its communications? How can communications be improved?

• How well does the company balance emotional appeal and logical arguments?

• In this post, you see “Starbucks response” on the company’s website and “Starbucks partners” in my text. Neither has an apostrophe. Is that correct?

Tourism CEOs Meet with President Trump

President Trump invited CEOs of major tourism companies to discuss the COVID-19 response.

Hilton CEO Christopher Nassetta began by highlighting issues in the industry:

“Hilton’s been around 100 years -- we’ve never closed a hotel that wasn’t going to be demolished or rebuilding, The bulk of our hotels in the major cities are closing as we speak.”

Nassetta was also complimentary to President Trump and Vice President Pence and said that he wanted to protect employees. The president reassured him that they’ll be up and running soon, although both said the situation is currently a “disaster” “all over the world.”

Discussion:

• How would you describe the purpose of this gathering? What are President Trump’s objectives?

• Assess each of the CEOs during the meeting. How well did they represent their brand?

Confusing Pie Chart

A former student sent me this chart, and he didn’t have a source, but it’s a good example of what not to do when creating pie charts. What problems can you identify?

Discussion:

• What principles of creating pie charts are followed, and how does the chart fall short?

• Is the pie chart the best choice for this data? What would be a better choice and why?

• What does the text imply?

More Toyota Recalls

About a month after the last recall, Toyota announced another recall for a total of 1.8 million vehicles. The issue is a fuel pump that fails, causing the car to stall and possibly not restart.

In both statements, Toyota calls the recall “voluntary,” but the number of models is significant, dating back to 2013. Like most recall messages, Toyota’s is straightforward and focuses on affected vehicles and the remedy—in this case a new fuel pump for free.

Image source.

Discussion:

• Analyze the recall message. Who are the primary and secondary audiences, and what are the communication objectives?

• Analyze Toyota’s website. How easy is it to find information about the recalls? What, if anything, could be improved?

Email Scammers

Remember those quaint email scams that were riddled with grammatical errors? A Wall Street Journal article describes new, sophisticated training for email scammers in Africa. A Nigerian is quoted: “You know how you guys play baseball when you are growing up? Here many of us learn fraud.”

Former scams involved people sending email asking for money for people in trouble or promising big returns on small funds. Today’s scams involve hacking into accounts and people learning about connections, for example, what vendors a company uses. A fake invoice to a known vendor is more likely to get paid. Using a grandson’s real name could lead a grandmother to Wal-Mart to send money to him, which happened to my friend’s mother.

About $1.7 billion was lost to email scams in 2019, and complaints are rising steadily. The article describes a “grooming” process “like organized crime.”

Discussion:

• We hear a lot about victims’ vulnerability, but what creates a culture of scammers? What makes people vulnerable to commit this fraud? For more about this, watch The Weekly documentary about love scams on Facebook.

• What’s your view of the bar chart in the WSJ article? How could it be improved? Would you prefer a more creative graphic, or does this work as is?

Comparing Headlines About the Market

How does the media describe the recent stock market decline? Let’s compare a few headlines:

• Dow falls 1,191 points -- the most in history (CNN)

• Coronavirus Drives Stocks Down for 6th Day and Into Correction (New York Times)

• U.S. Stocks Slide Into a Correction as Virus Fears Show No Sign of Easing (Wall Street Journal)

• Dow's point drop worst on record as stocks fall into correction (Fox News)

• Dow drops 1190 points amid coronavirus fears, S&P 500 sees fastest correction in history (Yahoo Finance)

Of the five, Fox is the only one that didn’t place a headline about the market at the top of its web page.

Discussion:

• What do you make of these headline choices, including placement? What might the wording indicate about the media group’s beliefs or audience?

• In class after a previous decline, I took issue with headlines like CNN’s. Do you see an issue? (Hint: What does a raw number tell us?)

Quantifying a Tweet

When someone in an organization goes rogue and sends a tweet, what’s the potential damage? The NBA found out the hard way that the financial impact could be significant.

In October 2019, Houston Rockets General Manager Daryl Morey supported Hong Kong protests in a tweet. As a result, Chinese advertisers pulled their ads and broadcasters wouldn’t air games. Now, NBA commissioner Adam Silver admits the loss will total “hundreds of millions” of dollars and “probably less than $400 million.” Silver expanded on the damage:

“It’s substantial. I don’t want to run from that. We were taken off the air in China for a period of time, and it caused our many business partners in China to feel it was therefore inappropriate to have ongoing relationships with us. But I don’t have any sense that there’s any permanent damage to our business there.”

Image source.

Discussion:

• Review the situation from October. What lessons can managers learn?

• What’s your view of Silver admitting the loss? What are the arguments for and against his honesty?

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?

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?

Emails Show USC's Potential Role in the Admissions Scandal

Actress Lori Loughlin and her fashion-designer husband Mossimo Giannulli have been charged with bribing University of Southern California athletic officials to get their daughter admitted. Now emails from USC show that the school was courting them by asking for donations and arranging for personalized campus tours. In one email, a university official wrote, “I’d also be happy to flag her application.”

A New York Times article summarizes how accused parents plan to defend themselves against charges:

Motions by several of the defendants suggest they will argue, essentially, that they could not have defrauded the university, as prosecutors say, because the university was actively seeking such donations and offering a leg-up in admissions in return.

In a statement, USC downplayed the special treatment:

“What was being offered to the Giannullis was neither special nor unique. Tours, classroom visits and meetings are routinely offered. The primary purpose of a flag is to be able to track the outcome of the admission review process. It is not a substitute for otherwise being qualified for admission to USC.”

Parents are expected to say that their donations were legitimate, but USC is expected to say that the bribery was specific to the crew team official, who “agreed to pass the couple’s two daughters off as coxswains.”

Image source.

Discussion:

• What’s your view of this situation? Do you agree more with the parents’ or with the school’s perspective?

• What, if anything, do the school’s emails reveal? Consider this message to the parents: “Please let me know if I can be at all helpful in setting up a 1:1 opportunity for her, customized tour of campus for the family, and/or classroom visit?”

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?

WSJ Opinion About Boeing Emails

A Wall Street Journal writer argues that Boeing employee emails “explain nothing.” A previous WSJ article concluded that emails demonstrated a “cavalier attitude towards safety,” and a Reuters article concluded that employees “distrust the 737 MAX” and “mock regulators.”

The opinion writer, Holman Jenkins Jr., argues, “all of corporate America, not just Boeing, lives these days by employing creative, freethinking people who spout off acerbically, critically and colorfully in electronic messages.” Jenkins questions the reporting of these emails and what is omitted.

Jenkins also asks why these employees didn’t write about MCAS design flaws: “If the hypercritical people seen in these messages had known about MCAS’s design flaws, it never would have gotten through.” He also notes that the only emails referring to MCAS were from 2013, although system changes were made in 2016.

Image source.

Discussion:

• Read Jenkins’ article. What do you consider to be his strongest and weakest arguments?

• Based on his argument and your own reading of media reports, what’s your opinion about the significance of the emails?

• What issues of integrity does this situation raise?

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?