Oxfam was a hitherto admired institution, having done impressive work around the world for more than 75 years, respected for its engagement with donors big and small, its courage in working in war- and disaster-torn regions, and its commitment to equality and fairness. The Haiti scandal has rocked it to its core, putting into question its ability to continue its operations, as governments are rethinking funding levels, donors withdrawing sponsorship and customers pulling out of their shops.
In other words, it is losing its licence to operate.
There are so many lessons that can be learned from brands which fail to protect their culture, vision and reputation. United Airlines CEO's response to the treatment of one of its passengers on a flight, Bell Pottinger's collapse through its final act of arrogance and despicable practices, and Volkswagen's emissions scandal are three that immediately come to mind.
There are two halves to any institutional scandal. The first is the scandal itself (crew dragging a passenger off a flight, installing devices to defeat diesel test monitors, masterminding a campaign to stir racial tensions) and the second, management's actions in the aftermath of the scandal emerging. Avoiding the first and addressing the second are equally important, so both need constant attention from the highest level of the organisation.
It is easy to think that avoiding the first can be done through systems, processes, rulebooks, policies. In this way, every time a scandal emerges, management can quickly produce evidence that a corporate regulation has been broken - therefore, the fault lies with individual 'rogue' operators who have clearly broken the rule. Job done.
Instead of rulebooks, the priority of good leadership should be vision, culture and ownership. Rules are there to be broken (I don't subscribe to this but it seems to be an all-too-often followed route) but culture is there to be lived. A process exists to be followed blindly, but a vision is a powerful inspiration and a framework for corporate behaviour. A system is there to be manoeuvred around, but good practice is there to be owned by every individual.
There is a nirvana that every employee, sub-contractor and partner behaves in accordance with the corporate vision, values and beliefs; ensuring that good practice is universally applied, continuous improvement and innovation encouraged and transparency, good governance and accountability are common practice.
Very few organisations manage to reach this nirvana - along the way there are falls from grace, corners that are cut. But those must be the exception and the way senior management deals with these falls from grace show very quickly the state of health of an organisation.
There are seven steps to this particular heaven and most of it is about good leadership which is visible, takes responsibility and actually provides leadership. You will note that dealing with an unfolding scandal and the communications issues around it comes in at number six - most of the crisis response work must have happened way in advance (with the added goal of avoiding the crisis in the first place). You may rightly conclude that neither Oxfam, United Airlines, Bell Pottinger nor Volkswagen followed these seven steps.
- There must a vision for the organisation so everyone has a roadmap towards the future, and knows what success looks like. Good leadership gets everyone involved in articulating the values of an organisation - which after all, has to be lived by everyone. Vision and values need to be constantly refreshed and everyone needs to be regularly reminded of them
- Good leadership nurtures a culture which encourages employees to be part of the success story, to contribute to new thinking and innovation and to live the values of the organisation. This does not happen by magic, nor does it happen by rote. It needs authenticity, consistency, role modelling, empowerment. It needs thought, it needs a strategy, careful planning and constant evaluation.
- Good leadership is comfortable with failures and mistakes. It encourages everyone to learn from these mistakes. When making a mistake is part of the learning culture, they are no longer hidden. They are noted, discussed and shared without blame.
- Good management puts checks and balances throughout the organisation which protects it and its employees from rogue behaviour, external unexpected pressures or strategic errors. Further, it involves everyone in ensuring that these checks and balances are maintained. It is in other words, in everyone's interest that institutional and personal integrity are maintained. Whistle-blowing, escalation and grievance policies need to be treated seriously.
- Good management provides strong engagement up and down the organisation, with partners, with funders, government, sponsors, customers. Engagement is a dialogue, it is not a megaphone. It is about listening as well as speaking. A strong and strategic communications function will make sure this happens. It will also put in place a far-reaching reputation risk exercise: scenario planning in the event of crises which might affect the organisation's integrity and reputation.
- Should a crisis occur, much of this will be kicked into action without a sense of panic. Leadership can establish facts quickly if internal engagement is in order. Pre-emptive action can be implemented without having to plan from scratch. Responses and position statements are much easier to manoeuvre and share. It is much natural for confident leadership to be bold about explanations, apologies, responses
- If the communications function is a strategic part of senior management, internal and external audiences will see a seamless response from leadership which makes sense, is credible, and trustworthy.
The absence of clear responsible leadership, strong strategic direction and a well thought-through crisis plan induces panic. The best way to lose trust is to come across as an organisation in panic. And the best way to lose the ability to operate is to lose trust.