New HR is your key to avoiding PR nightmares

Marketing can spin things all they want, but when your CEO screws up, even the most gifted PR reps can't save you. But HR can.

I read with dismay the actions of John Schattner, founder and former CEO of Papa John's. Having attended the University of Louisville, whose football stadium was named and sponsored by the pizza chain, I was familiar with some of the beginnings of that company. Like many, I heard stories of Mr. Schattner and his propensity for shows of hubris. And despite his condemnation of “news story after news story of CEOs who run companies into the ground,” in his 2016 autobiography, he seems to have done just that. But I don't think his behaviors was as unknown to the people who worked in the corporate office and interacted with him as it may have been to the public.

Stories of leadership like this happen all the time. And it is more pervasive than just as the top (that's just all we hear about) We've heard the medical stories where a surgeon operates on the wrong knee even when everyone in the OR knew a mistake was being made...why didn't they speak up? Fear and power dynamic. What's even more sad, is after the event, the story becomes rumor and underground reputation, not data to act on. 

Collecting real-time anonymous feedback from EVERYONE can help predict your risk to either large mistakes, unethical behavior, turnover, engagement, and legal trouble.

Data speaks louder than stories

When trying to inspire people, stories are great. But when it comes to exposing blind-spots, nothing speaks like data. Typically when we hear a story, it is crafted, hyperbolized, and cherry picked to make a point. Data, is all the other stories they don't tell you. Data gives proper context. Data is risk prediction. 

When one person has an experience it can be a story, when 20 other people have the same experience, that is data. Now, I don't know John Schattner, or Travis Kalanick of Uber, or any number of execs who recently found trouble with their behavior. AND based on the reports I have read, these weren't stories, these were multiple stories. Lawsuits and CEO ousters don't happen because of one incident, they happen because of multiple incidents. It happens because the data becomes too great to ignore and too public to defend.

"I am Spartacus" If you have not seen the eponymous movie with Kirk Douglas and Lawrence Olivier about the revolt of the Roman slaves, you need to watch it to understand the power of aggregate when it comes to tipping a movement. Or perhaps more recently with the women of #MeToo movement. A story may not have brought down the tyrants or oppressors, but several people united in message can change things.

The strength of anonymity

Anonymity has power because of the freedom it provides. Freedom from the power dynamic that is exercised and weaponized by the bullies who need oversight. The power to control someone's career, life, and personal safety is huge, and bullies thrive on intimidation, which is why most employees quit a bully manager without anyone ever knowing about it. According to a 2017 study, 61% of workplace bullies are managers. If you don't have something that provides a truly safe voice to the people who are being intimidated, you won't found out about their behavior until it is too late. And your "anti-harassment" policy that provides a process to side-step the chain of command, doesn't work. Mainly because those are stories...not data. I'm not saying they aren't valid, I'm saying they aren't given the voice they need to actual help you prevent or predict risks or even sometimes address the underlying power dynamic.

Board oversight

Who has the most to lose from a top executive's unethical behavior? I believe that answer should be the employees. They can lose their jobs, their dignity, their self-esteem, and in some cases, their lives. But sadly, people underneath the CEO have the least power to do anything. But boards and investors have some clout. And they have a lot to lose when CEO's screw up. 

If you are a board member who cares about share price, this should interest you. Papa John's stock has lost over 40% of its value from it's high last year of $81.09/share (currently at $51/share.) All from behaviors people knew about but were not given an safe space to have their voice heard. I'd argue that NONE of the CEO fails in the past decade (or further back if you choose) were a surprise to the people around them.

Board's often have sales metrics, customer acquisition metrics, spending metrics, etc. But rarely if ever, do boards have any level of visibility to feedback on the officers of the company and how they show up each day. Are they acting ethically? Are they bullies? Are they about to get you in trouble? You may have the voice of the customer which may help you see a downhill trend, but the voice of the employee can keep you from driving off a cliff. Executive malfeasance is not a gradual drop, it is a pitfall.

Engagement and Turnover

Why do people leave? What is the #1 reason? Bad managers. It is also the reason engagement has been stagnant for 30 years despite all the focus. Do you know who your bad managers are? Chances are, your people do without question. If you really care about turnover and engagement, you need to stop ignoring the obvious - you promoted the wrong person. Nearly half of identified "high-potentials" don't deserve the distinction. 


More data is usually better, and the right data is paramount. Most companies rely on lagging metrics, evidence AFTER the fact. But ongoing feedback on behaviors we KNOW lead to bad outcomes are your leading metrics that can help you PREDICT risk and therefore mitigate it more effectively before it becomes a investment or performance nightmare. Feedback is not just about top-down oversight, in the days of Glassdoor and social media, these stories will get out. You can either be ahead of them or victim to them.

Dave NeedhamComment