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Uber and the Dangers of ‘Macho’ Executive Posturing

James Haggerty  |  11.24.2014

Corporate Counsel

November 24, 2014 (link here)

I’ve often said that business is sports for those who were bad at sports. Since many successful businesspeople didn’t get the opportunity to impress their classmates with their on-field prowess in their high school days, they find the field of commerce to be the perfect venue to demonstrate to modern-day peers just how cool they really are.

I am reminded of this in light of the recent stories about Uber’s senior vice president of business, Emil Michael, who suggested that the fast-growing but controversial ride-sharing company should hire an opposition-research team to dig up dirt on media critics. As originally reported by Ben Smith of Buzzfeed News, Michael particularly singled out PandoDaily’s Sarah Lacy, in response to her accusations that Uber engages in sexism. Not unexpectedly, a media and social media uproar followed.

Was Michael serious about his plan? I doubt it. But without knowing him (or his athletic acumen, for that matter), I can tell you that this is the type of off-hand comment I see all the time in my crisis and litigation communications consulting work. It is particularly in evidence when the speaker wants to show his or her willingness to engage in bare-knuckled business or legal tactics—with the implication that this sort of “tough guy” behavior has made the executive in question a star.

While I call this the “macho” factor, for in-house lawyers and company PR executives, it has another name: Trouble. As one who is routinely called in when a crisis is brewing (or, perhaps, already is underway), my first meeting with a general counsel or company head of public relations often begins with the mutual refrain: “He [or she] said what?

My guess in the Uber example? Michael just wanted to impress the crowd socially and wasn’t thinking like an executive. According to media reports, he “floated the idea at a dinner Friday at Manhattan’s Waverly Inn attended by an influential New York crowd including actor Ed Norton and publisher Arianna Huffington. The dinner was hosted by Ian Osborne, a former adviser to British Prime Minister David Cameron.” To Michael’s eventual dismay, the dinner also included journalists like BuzzFeed’s Smith and Michael Wolff of Vanity Fair.

In the Uber exec’s defense, the event was apparently supposed to be “off the record” for the journalists in attendance; Smith maintains he was never informed of this fact (which leads me to a piece of advice I tend to give my clients immediately: you are always on the record, unless there’s been an explicit agreement otherwise before you start talking).

All of this raises an important point for GCs or any other company executives on the front lines of crisis communications: while you may think of a crisis situation as a product recall, plant explosion or cyanide-in-the-Tylenol moment, it more often is a “people” problem—an investigation into the accounting practices of your CFO; an executive who fudged educational credentials on his resume; an employment discrimination or sexual harassment charge; or (as we’ve seen all too often), the cover-up that ensues when you do have an actual product recall or plant explosion. Or, as in the Uber example, it can be inappropriate statements made by a senior executive, creating negative reputational ramifications for the organization.

Risk management in the crisis context, therefore, includes not just the proper safety and quality control procedures that ensure that physical incidents are minimized (and handled properly when they do occur), but also the proper training and response to ensure an organization minimizes the risk and reputational impact of people problems.

Look at it this way: while HR departments are skilled at outlining the parameters of proper behavior in the workplace, how much time and attention is spent on training company executives on proper behavior in the public arena or watching what you say when you represent the organization in any public context? Except for the occasional media training for executives as part of a formal public relations program, I suspect very little of this goes on—particularly when measured against the resources devoted to “hard” crisis events like accidents and product recalls.

In the end, reputational risk management is a game of percentages. Just as with physical incidents, where even though you cannot totally eliminate the possibility of an adverse event you take steps to ensure such incidents are few and far between (and that the organization acts appropriately in response to such events), so too in the area of “soft” crises. You may not be able to police every comment or action of the executives at your company, but you can take steps to lower the likelihood that an off-the-cuff statement at last night’s dinner party becomes this morning’s news.