Huawei, Boeing and McKinsey – When Internal Cultures Cause Reputational Crises

How much are reputational crises related to internal cultures, and an ability (or inability) to take into account a variety of diverse viewpoints?

I’ve watched over the past couple of weeks as the crisis around the Boeing 737 MAX has grown. Before that, it was Huawei and the suspicion in many Western capitals that the Chinese telecommunications firm was in a position to either spy on or act in favor of the Chinese government through sharing data collected through its network equipment. Before that, there was the McKinsey sagas in South Africa and Saudi Arabia respectively.

As a communications professional, it’s been fascinating (and painful) to watch events unfold. But one thought is stuck in my mind – is there a common thread to all of these events? And is that common thread an internal culture which is neither diverse or inclusive enough to understand and tackle issues before they become crises?

Let’s take Huawei, whose story has been covered in depth by a number of exceptional writers and features (check out Arun Sudhaman’s 4,000 word piece on the Holmes Report website). Huawei is a typical Chinese-headquartered multinational, with senior management being predominantly Chinese nationals. This has proved problematic for Huawei’s understanding of markets such as the US.

“There was always a fundamental lack of trust in non-Chinese. You offer guidance, and are regularly second-guessed,” Huawei’s former US public and government relations department, William Plummer, told the Financial Times. Plummer published a book last September in which he explained how senior local staff in foreign markets were regularly excluded from key decisions whilst Chinese executives second-guessed senior management in local markets out of fear of the company’s founder, throwing into turmoil into the company’s handling of PR and lobbying outside of China.

While McKinsey’s management is more diverse in nature, it could be argued that a an over-aggressive culture and a lack of local understanding resulted in the consultancy giant making one of its biggest ever mistakes. To quote from the New York Times:

McKinsey admits errors in judgment while denying any illegality. Two senior partners, the firm says, bear most of the blame for what went wrong. But an investigation by The New York Times, including interviews with 16 current and former partners, found that the roots of the problem go deeper — to a changing corporate culture that opened the way for an aggressive push into more government consulting, as well as new methods of compensation. While the changes helped McKinsey nearly double in size over the last decade, they introduced more reputational risk.


The firm also missed warning signs about the possible involvement of the Guptas, and only belatedly realized the insufficiency of its risk management for state-owned companies. Supervisors who might have vetoed or modified the contract were not South African and lacked the local knowledge to sense trouble ahead. And having poorly vetted its subcontractor, McKinsey was less than forthcoming when asked to explain its role in the emerging scandal.

McKinsey’s former managing partner told the New York Times that the firm had a “bit of a tin ear” when it came to the initial response. David Lewis, executive director of Corruption Watch, a South African advocacy group, told the NYT that: “For the scale of the fee, they were prepared to throw caution to the wind, and maybe because they thought they couldn’t be touched.” For me, there’s the feeling that the internal culture led McKinsey to make the wrong decision and down a path that would become the biggest crisis in the firm’s history.

Finally, there’s Boeing. The airline manufacturer is struggling with a crisis that has grounded worldwide its latest jet, the 737 MAX, after two crashes which share a number of similarities. The first crash happened in Indonesia last October, with the loss of 189 passengers. Following the second crash, this time in Ethiopia in March, Boeing was asked why more wasn’t done to fix the faults found to be responsible for the first crash?

In crisis communications, the most important action is post-crisis, and communicators are told to work with the organization to ensure that lessons are learned, solutions are found, and trust is re-built. This didn’t happen with Boeing – the software fix for the plane’s flight system has yet to be completed, and relatives of those who died in the first accident have questioned Boeing’s response.

Vini Wulandari, sister of one of the ill-fated Lion Air flight’s co-pilots, said that the Ethiopian crash confirmed the suspicions that she and many of the victims’ relatives had about the MAX 8 being a “defective product”.

“The [Ethiopian] crash shows that 737 MAX 8 is a manufacturing fail from the beginning,” Vini Wulandari, sister of one of the ill-fated Indonesian airline Lion Air flight’s co-pilots, told the South China Morning Post. “When I first heard about [the Ethiopian crash] I was sad because I am familiar with the sadness that the victims’ families must feel and I was also sad because the 737 MAX 8 should have been grounded after the Lion Air crash. Maybe because it was only one accident, so a lot of people thought there was no need for immediate [action].”

Was Boeing’s internal culture to blame, in particular Boeing’s urgent desire to come up with a new airplane that would compete head on with rival Airbus’ new models? It’s hard not to be convinced that Boeing rushed the 737 MAX’s design after reading a bombshell report in the New York Times.

It’s hard not to be swayed by the argument that uncompromising internal cultures are to blame for poor decision-making; too many similar voices, too few diverse views and an inability to listen have been a cause in each of these crises. That’s why proper inclusion matters, at all levels, as well as an ability to seek out differing viewpoints, especially from outside the organization. As communicators, we have to play a role in promoting both in our workplaces.

I’d love to hear your views on these crises. What’s your view? Message me, or leave a comment.


Why Attacking the Media Doesn’t Work – A Case Study with Etihad and Bloomberg

Unlike for certain politicians, corporates attacks on the media rarely work and often backfire

It’s fair to say the corporate communications world is a fairly quiet place in the Gulf, but every now and then there’s a story that even manages to make me go agog. Last week, whilst sitting in the dentist’s clinic, I picked up a copy of the local publication Arabian Business. The front cover was a story on the Abu Dhabi-headquartered airline Etihad. The airline has had a lot of turbulence of late, with a loss of $4.8 billion over a three-year period as investments were pulled in failing airlines.

With this in mind, I was looking forward to a good read about how Etihad was turning things around, and getting back on track. Instead, it’s fair to say the introduction wasn’t what I was expecting, particularly the quotes from the CEO of the airline (who is presumably media-trained). Have a read below, or see the original piece here.

Attacking the media isn’t a strategy that is often used by corporates, and should be avoided

Any good media person (and, by extension, corporate executive) should know that the media won’t always get a story right. It’s our role to protect and build reputations. For the media, their job is to report the news as they find it. This is especially true of newswires, which both seek out business news that isn’t pushed out by the communications team and seek to verify their news reporting through multiple sources.

Why did Etihad’s CEO attack Bloomberg? I’d argue frustration with the reporting, which I understand. Here’s what he should have done.

  1. Use Positive Language – What surprised me more than anything was the use of the language here, especially given who is being talked about. I have a great deal of time for newswire journalists, as they’re often the best in the industry. Negative language sticks in the reader’s mind, and makes everything else pale in comparison. I’ve forgotten everything else in the piece, which is much more positive, due to the negative language used here.
  2. Focus on your Company’s Own Actions – It’s a simple rule of media work that you focus on what you’re doing and the vision behind it. There’ll always be opinions and views on your organization, both good and bad. Reputations are built on actions, and Etihad has been looking to turn around the business and trim losses. That’s the lead story. Instead, the CEO has gifted the journalist a major headline, and re-focused the issue on the story he didn’t like.
  3. You’re always “On The Record” – Even the first comment, about being guarded, was strange. Every time I’ve given media training, I’ve always emphasized that anything an executive says is on the record, regardless of what is placed in front of them. In an interview, it’s good to build a rapport with the journalist, and put them at ease. A likeable executive is one of the best ways to do this (the best example from the aviation sector is the likes of Richard Branson, who always comes across as an interesting person you’d love to have a conversation with).

Ultimately, the media is one channel that communicators use to get information out to the public and other stakeholders. Nobody is right 100% of the time, including even the best journalists. If they’ve written a piece that’s incorrect, a communicator’s job is to get on the phone with them, point out the mistakes, and get on with telling their firm’s story positively.

Calling out the media publicly, through the CEO and in a derogatory fashion, only sours the relationship with both that outlet/journalist and also with the media in general. It also focuses the media on the negative issue, and ensures that the topic becomes front and center in any future media engagement. Any business which does this never gains any reputational value. It makes for a good read, however. So thank you Etihad from one reader for keeping my mind preoccupied whilst I waited to see my dentist.

Five Insights from Bahrain

In case you missed it (and why I’ve been so quiet for three months), IABC help their first-ever major event in the Gulf. Over 180 attendees, 50 speakers and 40 presentations over two days make EMENAComm arguably the biggest, and, more importantly, the most impactful communications conference in the region. It also gave me the chance to look at the challenges and opportunities that the profession faces.

Here’s my five insights from Bahrain.

1. Why Not Dubai?

Even before we began, there was one issue people were talking about. Whenever I spoke about EMENAComm, there would be two lines of conversation. The first, mainly from friends and colleagues in the UAE, was “Why not do the event in Dubai?” The second was, “We’re so happy you’re doing this in Bahrain!”

Dubai has become the hub for the PR industry across not just MENA, but for much of the Indian Subcontinent, the Middle East and Africa. It’s easy to see why: the incredible transport infrastructure and ease of access, including visas on arrival; English being the country’s de-facto language, and relatively simple business ownership rules (for IMEA, that is) mean that Dubai is where many clients and agencies have their regional bases.

Dubai’s position as the PR hub is reflected in the number of events in Dubai – we have a marcomms event every other week in Dubai. This is great for anyone based in Dubai, but what about communicators based outside of Dubai? In one of the conversations I had with an attendee, she thanked IABC for choosing Bahrain, adding that “I can’t remember the last time we had a communications event in Bahrain.”

For agencies in particular, my view is that they’ve got to start looking outside of the UAE and invest locally. In one conversation this week, one agency head noted that Dubai has been saturated for some time with rival firms. In contrast, he added a market like Saudi is still full of PR opportunities, provided that agencies invest locally. It’s time we all – clients, agencies and PR associations – invest in talent and operations where our clients are across the region, including with events that help support talent development.

2. We’re Busy!

The event in Bahrain would have been bigger, had all of those who said they wanted to come actually turn up. Unsurprisingly, we had lots of drop-outs. The response was the standard, “we have too much work.” There’s a couple of points I want to raise here, some of which worry me, and others which may be a silver lining.

First up, whilst its good that we’re being trusted with more strategic work, this comes with a caveat. It seems we’re not willing to push back to our management (one of our speakers dropped out on the Thursday before the event, due to last-minute work commitments – this person had several months notice on the event).

Second, our workload is increasing as we’re being asked to do more by our management (the trust element is good), and yet we’re not being given additional resources to deal with our growing to-do list. What is also concerning is that many communicators, particularly those at a senior level, are not able to take time out to continue learning. We work in a fast-changing profession, and we’ve got to keep up with the latest research, trends and tech if we want to become better communicators.

3. We want to listen, but do we respect people who listen?

Listening was a constant topic of discussion at EMENAComm, and was referenced by speaker after speaker as a skill that we should both use and promote more. I heard rave reviews about the listening workshop conducted by Howard Krais, Kevin Ruck and Mike Pounsford. Attendees all agreed that listening is under-utilized, especially in a region such as the Gulf where management (and communication) is often top-down.

This was music to my ears. And yet there was one moment where I had to pinch myself. I received feedback from one meeting about a person who stated that their aim was to listen and learn during the meeting itself. Another attendee felt that this wasn’t a sign of leadership. To this second person, leadership is about talking. Despite all the buzz around concepts such as engagement and experience, in societies such as the Gulf the idea of a leader can often revolve around the person who is dominating the conversation. How can we promote listening to engage employees and others if we still cling to notions of leadership that prescribe the person at the front must talk (or, at the very least, dominate the conversation).

4. There’s a fascination with psychology

Those talks which got people talking were all about psychology, be it Monkeys and Psychopaths by Ogilvy’s Joe Lipscombe and Nick Driver or Dawn Metcalfe’s talk about creating a stand-up culture. It was great to see communicators delve into why we think the way we do, and look at how they can use those insights to develop better, more impactful campaigns that draw their stakeholders in. There’s much more communicators can do when it comes to understanding human psychology, and factoring in those learnings when we create and execute campaigns. But just seeing the interest in this area gave me so much hope that we are moving in the right direction.

5. Technology matters, but we’re still experimenting

One of the most popular tracks was on technology. Speakers such as Adrian Cropley, Jasna Suhadolc, and Fady Ramzy shared insights into automation, digital marketing and artificial intelligence. For a region that is obsessed with tech and digital (I dare you to find a coffee shop where there’s no one on their smartphone in the Gulf), we’ve yet to use technology as effectively in communications. This may partly be down to the need for comms heads to hire more people with analytical/science backgrounds, but it may also be due to organizational leaders wanting to control the mediums we use. In a question to Meltwater’s Laila Mousa, one attendee admitted he struggled to get his leadership to embrace social media. As digital natives take over organizational leadership roles, I hope our adoption of technology will pick up.

That’s my insights done for now. If you attended EMENAComm and want to share your views, please do drop me a note and write a guest blog for me (you can see all the images here).

That’s all for now. And I promise, I’ll be writing more frequently from now on.

Why Communicators must stop Virtue Signalling

We’ve got to be honest about the challenges we face and how we deal with them

I just love conferences, especially about communications. There’s always the chance there’ll be a fascinating panel with a group of communicators who share their experiences and insights. I enjoy listening to professionals who tell it like it is, with no embellishments. However, when working in the communications function there’s always a danger that we stick to the narrative and come out with viewpoints that sound wonderful, but which are the opposite of reality.

Last week was one of those occasions. The excellent team at the Holmes Report were in Dubai for their second IN2Summit MENA. The opening, headline session asked if CEOs in the Middle East should take a stand on public debates and policy-making.

Given everything that’s happening, from the introduction of taxation to regional politics, you’d think that CEO activism would be at an all-time high. However, it’s hard for me to remember the last time a CEO in the Gulf spoke up on a hot topic (there are exceptions, and interestingly enough, the CEOs who do speak out often tend to be nationals who are close to government leaders).

I hoped I’d be wrong, and kept any questions to myself. However, when following the debate online, there seemed to be little alignment between what the panelists were saying and what’s actually happening on CEO engagement in the Middle East region. The moderator referenced Nike and Unilever, both great examples from regions where there’s significantly more freedom to engage in political debate.

One speaker commented that: “I believe CEOs should be involved. They should preserve the interests of the country as well as holding core values that are aligned with the government. Change doesn’t always come easy but it’s always necessary.”

Part of our roles as communicators is to agitate for change that will benefit our stakeholders. However, we are being disingenuous by sharing insights that are contrary to what is happening? Do we have activist CEOs who can openly engage on public issues in MENA? If there are more than ten, then please do share their names. I can come up with similar examples – one from two years back focused on whether we are speaking truth to power, which is a rarity in our region.

We need to ask these questions of ourselves, but we also need to be honest with our answers. Virtue signalling doesn’t do us, or those we work with, any good, especially when we need to work to change not just our roles but our environments as well. We must have the courage to speak up honestly, and point out when there are contradictions in what we want to do and what we actually do. This will not only benefit current practitioners, but also future generations (at the event there were several dozen students in attendance).That’s how reputations are built, on aligning our words with our actions.

Jamal’s Legacy – What PR Must Learn & Do Differently

Jamal was not only a remarkable journalist, but he was a wonderful person. I miss him.

It’s been over a month and I’m still in shock at what happened to Jamal Khashoggi, the Washington Post columnist who died last month while at the Saudi Consulate in Istanbul.

I knew Jamal. I first met him four years back at a SAGIA event in Riyadh. He was working with HRH Prince Al Waleed Bin Talal at the time, as a media adviser and the head of the soon-to-launch Al-Arab television channel.I knew of Jamal; he was the Arab World’s best-known journalist. Jamal was known for his bravery in tackling taboo subjects, and for being able to read the public mood better than anyone else. Jamal wrote for his readers, not his bosses. He’d twice been fired as editor-in-chief of Saudi’s Al-Watan newspaper. He was a journalist that I admired, both for his courage and also for his character (I’ve never met any editor-in-chief in the Arab world who was more open, more accessible and happier to talk than him – Jamal didn’t have an ego, but rather an appetite for debate and good conversation).

The coverage of what happened to Jamal has been extraordinary. One of the outcomes has been the beginning of a debate about the issue of freedom of speech, with one particularly brave piece by Abdel Aziz Aluwaisheg in Arab News (please do read the piece).

I want to focus this blog post instead on the role and responsibility of the PR industry, given the increasing amount of work done by agencies with governments around the world.

The “Everyone Should be Represented” Argument

There’s an argument that is often shared in the PR industry that everyone deserves reputation. This is the line used by individuals such as Lord Tim Bell. This defense, which is akin to the legal requirement for everyone to be offered legal counsel, misses two vital points. The first is the need for equal standards to be applied to all. To quote the previous Chair and Chief Executive of the Public Relations Society of America, Rosanna M. Fiske, who wrote in the Financial Times in 2012:

“We believe every person or organisation has the right to have its voice heard in the global marketplace of ideas. But for PR firms to represent dictatorships that do not afford that same freedom to their own people is disingenuous towards the liberties of a democracy and to democratic societies’ reputations as marketplaces for dissenting ideas.”

Even if we accept this argument, what do we do for those with no money? This is why the legal analogy is false. A lawyer will always be appointed to a defendant, no matter his or her financial status. This is not true in the PR industry. Many agencies do pro-bono work, but I doubt few are representing vulnerable groups in war zones. And that means by default that these people are voiceless. No one knows their stories.

What We Say Isn’t What We Do

What I’m often struck by is the dissonance between people’s views and their actions, especially in developing markets. I’ve seen time and time again senior practitioners tweet a piece of news about democracy in their own country, and yet they’ll be working for an organization that is being criticized by NGOs or single-issue groups. Are they aware of how they look? We live in a digital world, where people try to cultivate a different online persona. And many in the communications industry should know better when it comes to the difference between our online views, which are shared publicly, and our actions.

We also have a bigger issue to face, which is that of denial. When asked about a controversial client action, the most common response from a PR agency was, “we didn’t know.” We’re supposed to be consultants and analysts, the people who know what’s happening both externally and internally. This argument doesn’t wash with me. And it erodes the credibility in our own competency.

When we engage with anything that whiffs of controversy, we should be aware of what we’re getting ourselves into, and we should also be clear with clients as to our red lines. Once those red lines are crossed, we should walk away.

What has happened to Jamal is a tragedy. In the light of his death, I hope that we can all learn to become a more responsible industry. That’s the legacy we owe to him.

When Alex Met Arun: Thoughts on the future of the industry, good corporate governance and values-based engagement

I had the pleasure of speaking with the Holmes Report’s Arun recently, on a host of topics. I interviewed him for a podcast, looking at the future of the communications industry. He asked me about recent corporate governance issues in the Middle East. We also spoke about the rise of values-based communications. Have a listen and enjoy. And get involved by sharing your opinion.

Corporate governance should matter to all of us when it comes to reputation building

I’m sharing this article, which first ran in Communicate Middle East a couple of days back. I care deeply about the industry and about MEPRA, to which I gave five years of board service. My message is simple – we can and must do better when it comes to corporate governance. And MEPRA must lead by example.

“It’s no secret that I care about the communications industry in the region. I’ve done more than my fair share when it comes to supporting people and organizations in becoming more aware of what good communications is all about, and why it’s central to building strong reputations. I’ve also spent years advocating for the adoption of best practices, including good corporate governance, through both my day job and my board positions for several communications associations including the Middle East Public Relations Association (MEPRA), Global Alliance for Public Relations and Communication Management, International Association of Business Communicators (IABC) and Advertisers Business Group (ABG).

Good corporate governance builds reputation; weak corporate governance undermines trust. I’m not simply talking about following regulations and laws, but also the need to be transparent as well as feel that an organization’s leadership is doing the right thing, listening to concerns and acting with integrity. As a member of the communications industry who is interested in how my profession is perceived, I care about reputations and the need to do the right thing.

One of the organizations I’ve supported, both as a member and through a board position, is the MEPRA. As a member, I’ve always maintained that we must adhere to the strongest standards of corporate governance. It’s integral to our mission of empowering communicators in becoming strategic advisors, particularly to organizational leadership.

Given that, I’m confused as to how at least three members have been added to the organization’s Strategy Board in the months following the Annual General Meeting on February 5. There was no member’s vote on their nomination and no communication sent to members besides the update on the website. And I’m struggling to reconcile this with what’s stated in the MEPRA Charter. I’ll quote from the Charter:

  • The Boards shall be elected from MEPRA’s members.
  • The election will take place at the Annual General Meeting to be held each year or at an Extraordinary General Meeting if required and agreed by a majority of the Executive Board.
  • The Executive Board shall be responsible for establishing the nomination and election process each year, provided always that: nominations for each office of the Boards will be invited from the members of the association when giving notice of the Annual General Meeting. The Executive Board must receive all nominations in writing in reasonable time before the date of the Annual General Meeting. Every nomination shall be supported by at least two voting members of the Association. The Executive Board will circulate the list of nominations to members not less than two weeks prior to the Annual General Meeting.
  • Election will be by a simple majority of the members eligible to vote.
  • Voting will be by secret ballot.
  • All MEPRA members are eligible to vote in the election of the Strategy Board. Only members of the Strategy Board are eligible to vote in the election of the Executive Board. Only members of the Executive Board are eligible to vote in the election of Chair and Vice Chair. No member may vote for him or herself.
  • If for any reason a member of the Boards is unable to serve for a full two years the vacancy will be advised to the members and the Executive Board may fill the vacancy from any candidates that express an interest in filling the vacancy and which have the competencies required in order to fill the relevant role. The decision of the Executive Board in relation to filling vacancies shall be final.

This article won’t win me many plaudits, and I expect that I’ll be criticized for openly airing this. However, we must be able to have the courage to speak honestly, even to those in power. Speaking truth to power means that we believe deeply in what we say, that we care, and that we understand the risks of not doing so. Doing what’s right, rather than what is politically convenient, is incumbent on all of us.

It would be easier for me – or any of us – not to say anything. I was asked by a board member, “Why do you care?” I care because I am part of this region and this industry. Reputations matter, especially for a body that represents what we do. I believe in the region’s talent, and our ability to break down misperceptions about the Middle East when it comes to corporate governance.

I also realize that if we are not transparent, if we don’t engage proactively, and if we don’t follow our own rules, we will not have the trust that we need to raise the profession from one that simply executes to one that advises and guides a company and its board to do the right thing.

If you don’t believe me, that’s fine. I may be taking all of this too seriously. However, go and ask any Abraaj shareholder about the implications of weak corporate governance. If you still don’t understand the need to build strong corporate governance and its role in reputation building, then maybe communications isn’t the right role for you.