Management within a corporate culture assumes many roles and responsibilities, in relationships both with the down-line employees and with the up-line superiors. Effective communication is vital in the accomplishment of achieving company goals through strategic planning, evaluation and improvement of processes, and creating an environment of motivation.
However, there are times when a crisis occurs within the company that demonstrates how management works with the employees within the sphere of his influence. In this case analysis, a highly competitive toy company has a product in development that promises to push the corporation significantly ahead in terms of market share and profits. The design has been kept very secret. The CEO, Howard Tannenbaum, made it clear to all levels any leak in information on the new toy would not be tolerated. However, Tannenbaum discovered a leak occurred, although he does not know the source.
Extremely upset, Tannenbaum sends an email to his attorney and friend Barry, blaming managers for slack security and stating everyone was a suspect in the leak. In a separate email to the managers, Tannenbaum held each one responsible and should conduct thorough investigations. He demanded honesty and emphasized the investigations and results were top priority.
The managers were upset with the implication their CEO made concerning their culpability. Talking among themselves, rumors starting circulating and some discussed leaving the company. In addition, the original email to Barry surfaced, compounding the unrest among the employees. The press learned of the situation and the result was a perception the company was not in control and the stock prices showed a minor decrease.
It was possible to avoid this situation by management developing a plan in anticipation of a leak in security in the production of the new toy. Having a plan in place for utilization allows control in the eventuality of the crisis. Planning for contingencies and putting strategies into the plan permits management to immediately step into the situation, focusing on the worst-case scenario.
When Tannenbaum sent the two emails, he acted through emotion rather than immediately starting incorporation of a crisis plan. The alienation of the employees resulted from his insinuation they had not performed their responsibilities adequately and therefore were partially to blame. While is it not known the state of the relationships the managers previously had with Tannenbaum, they certainly suffered after reading the emails. A crisis plan would address effective and non-judgmental communication following discovery of the leak.
An example of this type of planning for a crisis occurred when the software firm
“37 Signals” promoted a product that was not functioning properly. Managers immediately adopted a crisis plan that included contacting customers, posting website updates, and accepting blame. All customers received a free month of service and 37 Signals created improved customer loyalty as an outcome.
The use of an effective plan for the crisis of an information leak can lessen the blow to the company and the outcome may be beneficial.
