Leading complex businesses is tough enough without the boss imploding as well. But that’s exactly what’s happened recently in back-to-back scandals at the iconic and traditionally consumer-savvy firms of Fox News, United Airlines and Wells Fargo. What’s more, only Wells Fargo has shown the path to correct such breakdowns.
Fox: Outed for Enablement
The management meltdown at Fox News began at the top, with chairman Roger Ailes forced to step down in late July 2016 following a tardy outside investigation of multiple sexual harassment allegations from employees who said that their careers were endangered if they rejected his propositions. His ouster was catalyzed by a year’s worth of anchor Gretchen Carlson’s concealed iPhone recordings of Ailes’ entreaties and threats. This was followed by the parallel complaints of many other women employees, including star anchor Megyn Kelly.
Ailes’s exit did not put a stop to the locker-room culture, and charges against others in management continued to surface. 21st Century Fox Chairman Rupert Murdoch and his sons James and Lachlan missed the opportunity to overhaul the culture of Fox News—a $ 1 billion-a-year profit fountain and leader in cable TV.
By April of 2017, The New York Times was reporting that five women had received a total of $13 million to settle harassment allegations against Fox’s top star, Bill O’Reilly. Finally, after vividly detailed public charges of abuse by O’Reilly from a Los Angeles radio host cost the company 70 advertisers, the Murdochs hired the same law firm to investigate the charges.
“Too often, bosses make a bad thing worse, while boards collude by watching from the sidelines.”
The Murdochs similarly hesitated to take decisive action from 2009 through 2011, despite mounting evidence of bribery, phone hacking and other techniques for widespread illegal acquisition of confidential information at News Corp International’s UK sister print media outlets. Eventually one publication was closed and top editors were fired—including a Murdoch favorite, top executive Rebekah Brooks, only after Parliament and various government agencies began investigations that led to criminal convictions.
United: Caught on Camera
In March of 2017, United Airlines CEO Oscar Munoz was anointed “U.S. Communicator of the Year” by PR Magazine. Just one month later he was skewered for defending his employees when they and airport officials dragged a passenger off a plane, injuring him in the process, to free a seat for an employee. A video of the incident went viral accompanied by comments like “not enough seating, prepare for a beating” and outrage at comments from Munoz (who later apologized) describing the violent incident as having to “re-accommodate” the customer and describing the passenger in question as “disruptive and belligerent.”
Wells Fargo: Suspect Sales Tactics
Wells Fargo’s board, while initially too trusting of former CEO John Stumpf, at least came clean with the April 17 release of results of an outside investigation that criticized its own terminated top leaders for deceitful high-pressure cross-selling sales tactics that led to the creation of 2.1 million unauthorized accounts. The company clawed back $183 million in bonuses and hired back 1,000 wrongfully terminated employees who refused to comply with the improper sales schemes and revealed how new leadership was fortifying its ethical foundations.
As U.S. Navy Commodore Oliver Perry famously proclaimed in 1813, “We have met the enemy, and they are ours.” (Cartoonist Walt Kelly later parodied that pronouncement through character Pogo the Possum, declaring “We have met the enemy and he is us.”) Woefully, this admonition has been forgotten. Too often, bosses make a bad thing worse—while boards collude by watching from the sidelines.