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After the Oscars Flub: 5 Things On the Mind of PwC Chief Tim Ryan

It was Cullinan's mistake, but how PricewaterhouseCoopers CEO Tim Ryan handles the fallout is what will have the most effect on the company.

GettyImages-645894650-compressorIt’s been a long two days for Brian Cullinan, the PwC managing partner who gave Warren Beatty the wrong envelope on Oscars night. But it’s also grueling for Tim Ryan, PwC’s U.S. chairman.

Ryan quickly tried to get out in front of the Best Picture debacle by apologizing for the firm’s mistake to anyone who would listen—including fingering Cullinan. And he wrote a memo to PwC employees.

“This was our issue,” Ryan told the Wall Street Journal. “PwC made the error, and we’re accountable.”

But now comes the really hard part for Ryan, who became PwC’s American chief only last summer: What does he do to follow up on Cullinan’s error to protect and advance the firm’s interests as best he can?

“This was our issue. PwC made the error, and we’re accountable.

Ryan gave the New York Times a clue. “What was going through my head at the time [the mistake was unfolding] was, ‘We have to get to the bottom of this, and if we made a mistake, we’ll own up to it.’ My philosophy in life is, bad news doesn’t age well.”

In the meantime, here are five considerations that likely are top of mind for Ryan.

1. Determine how much is enough. It’s not like this problem is going away. As the chief bean counters for Oscars votes for 83 years, being both dependable and in the background has been absolutely crucial for PwC (and its predecessor firms) in its relationship with the Academy of Motion Picture Arts & Sciences.

Cullinan’s flub blew up both attributes. Or, as Leslie Moonves put it, “The accountants have one job to do—that’s to give Warren Beatty the right envelope.” The CEO of CBS said on a TV interview, “That’s what these people are paid a lot of money to do. If they were my accountant, I would fire them.”

But it also might be possible for Ryan to over-react. “From an actual business point of view, it’s kind of minimal,” Tom Rodenhauser, general manager of ALM Intelligence, which tracks the consulting industry, told the Journal.

“Transparency into how it happened can help.

2. Decide what to do about Cullinan. The Matt Damon lookalike, PwC U.S. board member, and top-ranking partner in its Los Angeles office has emerged as something more of a villain than one might think possible for someone who’s supposed to be invisible.

PwC said that once the mistake was made, Cullinan didn’t follow through “quickly enough” on “protocols for correcting it.”

And news media quickly made it clear that Cullinan had embraced his role in the wings perhaps a bit too vigorously, over the years posting many pictures of himself with Hollywood stars on social media and regularly chatting it up with celebrities backstage.

And just three minutes before he gave Beatty the Best Supporting Actress envelope instead of the Best Picture envelope, Cullinan tweeted a glamorous photo of Emma Stone—after the Academy specifically had denied him permission to use Twitter back stage, according to the Journal. So Cullinan now is being painted not as the remorseful committer of a silly mistake but as someone who might have made the error because he was too concerned about his social-media stats.

It even seems a bit like hubris after some of his remarks. “We’ve done this a few times, and we prepare a lot,” he told a TV crew before Sunday’s show, according to the Times. Will it be necessary for Ryan to fire Cullinan? Whatever Ryan’s plans now, they will be influenced by future coverage of this disaster.

3. Re-examine quality control. Sunday’s disaster may prompt Ryan to take a closer look at procedural dependability. But Cullinan’s error seemed to be a gigantic, bone-headed one-off.

Over the decades, PwC had honed the process to near perfection. For example, it uses two complete sets of envelopes, with one placed on each side of the stage so that award presenters can snatch the appropriate document no matter whether they enter stage right or stage left.

Each PwC partner holds a huge leather attaché that contains the sacred envelopes. On Sunday, Cullinan’s bookend on the other side of the stage was Martha Ruiz, the other senior partner overseeing the voting process.

The PwC chief could gain simply by explaining as fully as possible what transpired. “Transparency into how it happened can help,” V. Kumar, a business professor at Georgia State University, told NBC News.

Ryan also could come up with some improvements, perhaps. It might be important to do so just so that he could make a point of publicly re-dedicating PwC to the mission of ensuring that this kind of mistake never happens again.

4. Reshuffling company priorities. Ryan made a decision very early in his tenure to react to last year’s racial struggles in the United States and devoted PwC to diversity in recruitment and hiring—earning the nickname “the quiet revolutionary” from Fortune magazine.

“Diversity was an important element that we needed,” he told Chief Executive last summer. “That meant looking for diversity in every sense of the word.” But dealing with something as basic as reliability, which is highlighted by the Oscars mistake, could cause Ryan to shelve what could be seen as less-urgent initiatives.

5. Preventing long-term damage. Ryan said that there hadn’t been any immediate discussions about whether PwC’s longstanding contract with the Academy is in jeopardy.

The Academy said it is investigating and would “determine what actions are appropriate going forward.” It added, “We are unwaveringly committed to upholding the integrity of the Oscars.”

No doubt competitors are gearing up to try to pry the Oscars away from PwC. And recruiters will be hearing from millennial candidates that PwC was “the company that screwed up the Oscars.”

Ryan surely will move to shore up PwC’s other relationships, but he probably can be more confident with clients among whom are 82 percent of the Fortune 500. “I don’t think this will ultimately hurt them with their vast number of corporate accounting clients,” Mark Serrano, CEO of ProActive Communications, told NBC.

But surely, Ryan will need something that he told Chief Executive is very important for someone in his job: “Thick skin.”


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