Corporate shabbiness

By Michael Breen

Whatever criminality may or may not eventually emerge from the humidifier sterilizer tragedy in which hundreds of consumers died, the response of Oxy Reckitt Benckiser, one of the main companies involved, is the latest example in a long parade of corporate shabbiness.

From the Sewol disaster to the occupational diseases at "S" company and the garbage-in-mandu case involving "C" and other companies, it seems that the instinct of executives in a crisis is to deny responsibility, fight a rearguard legal and public relations action, and then pretend to apologize when there is no other way out.

Such cases impact us all in this capitalist democracy because the moral that seems to emerge is that private enterprise is dirty because human nature is base.

But there is another lesson to take away from such failures.

It begins, I would suggest, with the acceptance that, while we experience life as individuals, we are looked upon by others as representing something larger than ourselves, and that the way to do this properly is not to be skilled in evasion and manipulation but to be clear about our values.

First, on the matter of representing something larger, the impulse to evade responsibility comes from a sense of unfairness.

I am sure, for example, that far from feeling responsible, most individuals in Oxy Reckitt Benckiser feel like victims.

I can relate to that. This Saturday night I was standing on a sidewalk talking with a group of expatriates when a taxi driver wound his window down and mouthed off at us. That wasn't very fair. Our crime was that whatever larger group we represented in his head set off an angry association.

Being white, British and male, I'm used to triggering a bunch of associations in people about colonialism (half of mankind), male chauvinism (another half of mankind), and other stuff.

Your reaction depends on your values, for these are what shepherd your emotions and concerns.

Consider this long-standing example: when several people in America died after taking the pain reliever Tylenol, the manufacturer, Johnson & Johnson, took full responsibility. It told consumers to use competitor products instead of Tylenol, recalled all stocks from every shelf in America, and provided store credits to people who handed over the supply they had at home so they could buy alternatives.

Compare this with Oxy Reckitt Benckiser's actions in the humidifier sterilizer case. It took its CEO five years to accept responsibility and say the firm would make amends (even now it's not clear what that means).

How to explain such widely differing responses?

You can find the answer on the companies' websites in the section on corporate values. Now, let's face it, since the invention of the website, every company feels the need to to chuck something down "About Us". There's a lot of guff that even the PR director who wrote it doesn't believe. But the clues are there.

No offense to investment bankers, but Reckitt Benckiser, which is a consumer goods company, sounds like an investment bank full of Alpha males. Its values are: Achievement, Entrepreneurship, Partnership, Ownership. There's some stuff about caring for the world but here's the vibe this company gives: "From each individual team member to global financial goals, we consistently outperform. Targets aren't created to be hit, they exist to be exceeded."

This woop-woop-high-five approach to business is all well and good but it needs to be subordinated to a higher purpose that answers the question, "What does this company exist for?"

If the answer is the outperforming stuff, it means that when a crisis blocks the ability to perform, the strategy adopted to deal with it will be belligerent. If a corporation lacks explicit values that employees know and live by, they will fall back on the unspoken values of the dominant figures.

With Johnson & Johnson, the key theme was responsibility. It has a code of conduct that you can download in 22 languages, including Korean, and which has its own tagline ― "Live Our Credo, Know Our Code."

Here's a flavor: "We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services…"

You can imagine the Tylenol crisis meeting. The PR person reports on the latest media reaction, the legal counsel says the FBI thinks there's a tamperer out there and that the company is not at fault, the investor relations head reports on the plunging share price, and the finance person calculates the losses. They all urge the CEO to avoid an expensive recall. Then someone reminds everyone else, "If our first responsibility is to doctors and patients and some have died because they took our product, what must we do?" The answer is clear to all.

The pity of it is that this old example is still so rare.

What companies need to understand is that the public fury over the humidifier sterilizer case is not a consequence of what happened, as awful as it was. It is a consequence of the grubby attempts of the main players to keep trying to "outperform" instead of doing the simple thing and, mindful of all those consumers who had helped them achieve and earn their bonuses, by being responsible and decent.

Michael Breen is the CEO of Insight Communications Consultants, a public relations company, and author of "The Koreans" and "Kim Jong-il: North Korea's Dear Leader." Write to mike.breen@insightcomms.com.