No matter how many examples we see of companies and leaders attempting to hide bad news, some leaders persist in attempting it. The idea that any leader is so special or any situation is so unique that they can succeed this way would be laughable if it weren’t for the damage done by such folly. The debacle at Equifax is a disastrous case in point. Consumer’s exposure is incalculable, shareholders have suffered staggering losses and the future will be packed with lawsuits.
In the case of Equifax, it appears that a number of high-stakes decisions were avoided and perhaps in the minds of the leaders, postponed. Given the speed of matters in cyberspace, there isn’t time to kick the can down the road. A vulnerability that goes unaddressed merely allows the evil doers more access. Every hour matters, never mind weeks or months.
Further, intervening at a specific, technical level without looking at the issues systemically should be something leaders simply don’t allow. Technology is ingrained in our lives. Its importance is on both sides of the equation – growth and risk. This is precisely why companies have board-level committees meant to oversee technology, as Equifax does. The committee has some excellent expertise aboard. One wonders what they were told and what sorts of questions they ask to make sure that the management isn’t hiding anything, even if they think its minor. The board is there to help them see things from a different vantage point and they can add tremendous value when that actually happens.When leaders achieve success, some begin to think they're immune to the foibles that plague others. Click To Tweet
This is dangerous. If leaders think more about maintaining their position than fulfilling their responsibility, they might avoid bad news. Finally, when leaders focus on damage control, they often respond too slowly and with little sincerity. Jim Cramer, the financial commentator views Richard Smith’s actions, or lack thereof, as insincere. He wondered on his show, Mad Money, if Richard Smith actually cares about the consumers and shareholders who will be massively impacted by what has happened at Equifax.
I don’t know what Smith cares about but I do know that failure to respond quickly and with sincerity is more than off-putting; it is an impediment to restoring a company’s good name. That is why the board of Equifax needs to get involved. This is far more than a technology problem or even a legal one. It is a leadership problem and very high-stakes.
The ongoing debacle at Equifax is a current example of how not to handle a crisis. The drip, drip, drip of bad news erodes confidence as the expectation of another shoe dropping grows. I’ve said it before but it bears repeating. When you are in a crisis the first thing to do is recognize it. The second is to act like you know.
In the Atlanta business community, and elsewhere, there are terrific experts in Information Technology. I’ll leave it to them to assess and comment on the technical issues. Those I have spoken with agree that a leader who doesn’t listen and doesn’t notice what should be noticed can’t be helped by their expertise. I understand that well because my expertise is in high-stakes leadership. When my clients have a crisis, they often, upon reflection, realize the signals that they ignored early on. That takes courage and without it, leaders don’t learn and that leads to disasters.The highest stakes of all result from a false sense of security on the part of leaders. Click To Tweet
Waiting until ones feet are wet to realize that the tide is in is not leadership, it is abdication and does not deserve defense.