Tech's "We Have to Do Better" Crisis

Zuckerberg crisis.jpg

It seems like all the crisis communications professionals have either left the valley, or have never actually handled a crisis. I am amazed at the number of scandals that have been so poorly managed lately. Facebook took forever to respond to the Cambridge Analytica scandal, and when they finally did comment, it was a poor and impotent response. From Uber's many scandals to Apple's iPhone battery scandal to Facebook's many privacy breech scandals, the response seems to be a consistent, impotent statement:  "We have to do better." 

I'm not sure if the crisis professionals are being ignored, as that is certainly possible. Or maybe  Silicon Valley's reputation for valuing fresh, young ideas over experience means there aren't many people who know how to properly manage a crisis. Whatever the reasons, the result seems to be the "ostrich" approach. Just bury your head in the sand until it goes away.

That tactic may have worked for a while. But when Congress starts calling you in to testify or talking regulation or monopoly break-ups, you've kept your head underground for too long. 

"We have to do better" is the crisis mantra for the technology industry. The problem is, no one actually does better, and that's key to crisis management.

The San Jose Mercury News once did a story about a client of mine. The reporter did an investigative report that exposed child labor practices at my client's plant in China. My first question to the CEO was, "is it true?" When he said yes, my next question was, "what are you going to do about it?" He said, "Nothing. Because it's cheap labor and people don't want to pay higher prices for their computers." Of course, I had to resign the account because if you can only say something benign like "we have to do better" but in practice don't intend to do anything, your crisis isn't solved. It's ongoing. And that's what we've been witnessing in Silicon Valley. The same scandals keep being repeated because no one is motivated to actually do better.

The best crisis communications management I've ever witnessed in my career was the Odwalla crisis. For those who don't remember, Odwalla's orange juice was not pasteurized back then and caused an e.coli outbreak. Instead of staying silent or lawyering up, Odwalla faced the crisis head on. They expressed concern for the victims. They voluntarily paid for the hospital bills and funerals. Most importantly, they not only promised to do better, they actually did better. I remember a 60 minutes story where the CEO took the reporter on a tour of the orchards, the manufacturing facilities, the distribution centers, and even the retail deliveries. He demonstrated all the new safety practices in place to make sure this never happened again. Their crisis management was so successful, they had merchants across America putting signs in their windows saying, "We proudly carry Odwalla products." Odwalla took a crisis and transformed it into a customer and retailer advocacy campaign. As brilliant as the Odwalla case study was, I can't name another crisis situation since that was nearly as successful. Today, we're left with crisis management solutions that consist of "we can do better." It's cringe-worthy and frankly embarrassing given the brilliant minds that live in Silicon Valley. 

Don't get me wrong. I'm completely aware that Facebook and Google's silence is a strategy. Facebook wants to proliferate the myth that the Cambridge Analytica scandal is only a privacy issue, so the less they comment, the faster the story moves. Google wants Facebook to take the hit for this scandal, even though Google also sold data to Cambridge Analytica. If Google stays quiet, Facebook takes the fall. This approach works for the short-term. But in the long-run, both companies are sowing seeds of distrust among their users, advertisers, shareholders and especially government regulators. Eventually, there's a breaking point where advertisers bail for fear of their own backlash. If Facebook and Google do not address their communities with a real plan for how they are going to fix their own problems and begin to rebuild trust, the issue could get as out of hand as their data crawling algorithms.

I recognize that Silicon Valley isn't the only industry that has done a dismal job of handling crises. United Airline's string of bad PR over the past year has dwindled away at its profits compared to other airlines. Wells Fargo has had a string of scandals that have also hit its profit margins. And of course the #metoo movement not only took down celebrities, it took down the Weinstein Company and its CEO Harvey Weinstein.

Companies don't collapse because of bad publicity. They fail because of bad behavior that persists. The behavior that is causing the ongoing scandals in Silicon Valley is persisting. Facebook's business practices and business model has not changed since the Cambridge Analytica scandal. Therefore, the situation is repeatable. Uber's CEO might have been pushed out because of their series of mismanaged scandals, but their ego-driven, combative culture and history of hostility towards criticism seems to linger (as evidenced by some petty tweets about MIT research). And the collective "we have to do better" cry that the technology giants gave after a dismal diversity report several years ago has resulted not only in literally no movement towards diversity, but there seems to be no concrete plan by anyone to fix Silicon Valley's diversity problem.  There's a hubris unique to Silicon Valley in believing you can get away with this amount of repeated scandal and misdeeds by simply saying, "we have to do better."

So when one company CEO I was speaking to recently brushed off his bad publicity with the old "all publicity is good publicity" myth, I reminded him of the bad publicity/bad behavior grave yard: The Weinstein Company, Enron, MyRichUncle, WorldCom, Lehman Brothers, Bernard Madoff Investment Securities, Tyco, AIG and many more, but I leave you with the newest fatality, Cambridge Analytica.

When it comes to crisis situations, Silicon Valley seems to have the idea that we're untouchable. The technology is often too complicated for the public to understand, or its become so ubiquitous that customers won't leave. Perhaps all of that is true. But as we watch Cambridge Analytica close up shop, Facebook's stock stumble, Uber's CEO get ousted because of repeated crises, talk of regulating Google for monopolistic practices, and the EU imposing harsh penalties for violating privacy guidelines and data security breaches via the new GDPR regulation, the technology industry may finally be headed for a reckoning. That means we not only have to behave better, when it comes to crisis communications and relating to the public, "we have to do better."