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Crisis Unfolding: Early Lessons From Penn State

By Merrie Spaeth, Communications Counselor; Director of Media Relations for President Reagan

As the summer 2010 BP Deepwater Horizon debacle unfolded, the lessons to be learned were comparatively easy to identify and apply. Run crisis simulations. Set expectations that facts and numbers will change. Make sure your spokespersons can identify with key audiences. Rehearse. Words matter. Don’t fudge the pictures. Have competitive video ready. Enlist your own employees before the crisis.

Only one of these lessons applies to the Penn State tragedy which is that what we know will continue to change as the investigation and legal case unfold. It is inconceivable that a large institution lacks policies and procedures that deal with illegal activities, sexual abuse and sexual harassment. However, it would be a grave mistake to think what happened at Penn State is due to one bad apple and a few missed signals. If the University approaches the "fix" with that mindset, it will ensure failure.

The lessons result from an apparent blindness and a failure of imagination. Not imagination of the creative kind; imagination as the ability to conceive what could go spectacularly wrong and threaten the institution’s reputation almost permanently.

The business buzz word for these is a "Black Swan" event, but that usually refers to something you might encounter and analyze at business school: a factory in China discovered to be contaminating your product, the recent listeria/cantaloupe scare, or terrorists kidnapping your CEO in Niger.

The Penn State scandal doesn’t fall into this category. No business school case study examines what to do when a senior, trusted, even loved executive is found to have sexually abused children and other people knew about it and failed to act. This isn’t even a Watergate-type cover-up. It’s a serial ignoring of events, and a complete abandonment of a moral compass.

Ohio State professor Dr. David Woods works in the college’s Department of Integrated Systems Engineering. He studied the Challenger and Columbia disasters at NASA and describes three levels of failure. The first is operational failure, and organizations typically respond by looking at each individual process to figure out where to assign blame. That’s what NASA did after the Challenger incident. The second level is enterprise failure, "How did the whole system break down?" The third level, according to Dr. Woods, is to understand how the enterprise can learn from systemic failures and make changes to prevent more or new failures from occurring. He says that it’s important to learn from the systemic lessons that lead to fundamental change and to avoid retreating back to the first level where the attempt is to find individuals to blame.

After the Challenger tragedy, NASA examined the O-ring failure and went piecemeal through its operations. But they failed to learn the larger lessons. The analysis of the Columbia failure revealed that they were thinking about the wrong things that might go wrong. One of the most famous PowerPoint slides created and immortalized in Professor Edward Tufte’s "The Cognitive Style of PowerPoint" is one of a sequence in which NASA engineers and contractors examine the risk to the shuttle from being hit by debris. Tufte’s scathing critique notes how the layout, lack of clear message and inconsistency of language obscured the real message about the data they were examining. Dr. Woods points out it was also measuring the wrong thing. Like the moment in the "Indiana Jones" movie where the hero realizes, "They’re digging in the wrong place," the NASA data examined debris damage while the shuttle was in space, not during take-off.

Translating this to the Penn State situation, it is important to examine the environment as a contributor to the potential for a crisis like this. For example, why did University officials behave as they did? The football assistant recently came forward and said that he intervened and reported the incident to authorities. However, after witnessing such a horrifying act, where was the urgency to follow up and get a pedophile off the streets?

Taking this to the next step, why did one of the victim’s mothers report her concerns and suspicions to the University and not to the police? Is it possible, even probable, that the University is such an enormous presence in the town that people, even this mother, shrink from making an inflammatory accusation for fear that it could result in a painful backlash?

Why did the Athletic Director do nothing? The interview with the graduate assistant is described as occurring "later that month," hardly the timeliness one would think this situation warranted. And the University security or police took no action. It was only when another parent actually went to the city’s police, who heard the potential complaint as it should have been heard and not through the filter of a willingness to protect the University and its football program first or at all costs, that a true investigation was launched.

Although there has been extensive coverage of the event and most of the timeline and Grand Jury findings are public, the question is: what can other institutions learn from this? The answer is not the obvious "Have tighter policies for child abuse or sexual harassment and reporting." The most important lesson for our clients is: what are the unspoken barriers or constraints that affect how we process information and how we act.

In the classic book, "Animal Farm," one of the pigs announces, "Some animals are more equal than others." An enterprise can plan all it wants, but if people, by rank or belovedness, are off limits, the wheels can come off the track. This condition exists in many companies. The CEO, the C-suite or long-standing, entrenched individuals, are not challenged. There is a tacit acceptance that they are "more equal."

By extension, if an enterprise "owns" its proverbial town, it can have a significant impact on who is held accountable. The judge hearing the case ruled against the prosecutor’s request for a million dollars bail and an ankle bracelet and imposed only $100,000 bail. News reports indicate that the judge volunteered for events hosted by Mr. Sandusky’s charity, Second Mile. This association may be innocent, but it was guaranteed to come to light and to question the impartiality of the judicial process.

In 1999, Coca Cola faced a crisis in Europe, pulling product off the shelves in several stores because of a "bad smell." The case study provides a number of lessons applicable today, particularly because the French Ministry of Health produced a report concluding that there never was anything wrong with the product; it was mass hysteria. In other words, it was an imaginary crisis. Until then, we were occupied thinking about real potential problems. Coca Cola’s experience caused many companies to ask new types of questions about what could go wrong.

Penn State’s tragedy should cause companies to ask another set of new questions, are we hearing what we need to hear or are we living in a bubble? This is far harder than planning for an operational crisis. It requires holding an uncompromising mirror up to an organization, its personnel and its surroundings.

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