Navigating the Business News Farce
We know the algorithm for political news: Headlines that blast “_____ Sparks Outrage.” Articles that confirm that [Insert hated group] is as awful as you think they are and who deserves your wrath. It’s all designed to get your dander up and hook you into coming back for another dose of pique.
There hasn’t been much talk; however, about how the “algorithming” of news manifests in what we hear about businesses in crisis.
Business news is confronting a similar crisis to political news — coverage meant to facilitate a cycle of provocation and return. It works like this: A company faces a high-profile reputational event. The media commence coverage. Experts are called — investment analysts, flacks, corporate governance types, and B-school professors. They will be pre-selected for their willingness to say something foreboding. Before they take to the airwaves, there will be “pre-interviews” to assure they’ll say something colorful and ominous. These experts will confirm that this is the worst crisis imaginable, and it will be hard for the company to survive.
The CEO’s damage-control interview will be deemed a Prince Andrew-level disaster. The company’s apology will be considered insincere or “too little too late.” The CEO’s comments will be declared “tone deaf.” A news anchor will ask a pundit if the CEO can survive. The answer will undoubtedly be negative and in the spirit of the Queen of Hearts in Alice in Wonderland: “Off with his head!”
Now the clock starts ticking until the boss’s head falls into the basket at the crowd-end of the guillotine. The coverage is over-determined and performative, something I refer to in my book Glass Jaw as “the fiasco vortex.” It all agitates toward an inevitable conclusion that a management shake-up, not to mention a major investigation, is called for.
The company’s board, of course, is following this horror show in real-time, and they want it to stop. But how? They know there is only one way: They have to listen to the Queen of Hearts and roll some heads. It’s what coverage demands because it consummates the outrage and moves it to the next dose, which is coverage of the execution, speculation about who will succeed them, and what horrors will emerge in the blue-ribbon investigation to follow. Will there be indictments? (Ooh, I hope so!)
Short-sellers have become facile at fanning this phenomenon and their contacts with journalists and pundits run deep. It wasn’t always like this. Sure, being a CEO always comes with a lot of pressure. Still, part of the current level of obscene compensation is about the implicit understanding that if you’re going to end up as a gratuitous moose head on somebody’s wall only never to work again, you’ll want a little insurance. Actually, you’ll want a lot of it.
So, what’s a company to do? First, accept the farcical nature of the current state of play and plan accordingly. If the farce demands the CEO’s head, this has to be an option on the table even, if it’s performative. In the cases I work on, everyone likes to pretend this isn’t up for consideration even though everyone knows it is. After all, who wants to present the “throw the virgin into the volcano” idea to the sacrificial party who signs off on your salary?
Second, and most importantly, there are plenty of relevant audiences to be mindful of beyond the media and general public that you actually have a good chance of reaching. Employees. Investors. Communities. Vendors. Partners. Legislators and regulators. While you won’t likely be able to stop the farce — everybody tries, most fail — you may be able to win the support of others you need going forward. This should be your focus.
The good news is that most companies survive and prosper. I did an interview a few years ago when a huge company was facing a battery of recalls. “Do you think XYZ Co can survive?” the host asked with a concerning raise of the eyebrow. “Yes,” I said. “And they’re going to because it’s a good company. They just have to make it through the farce period.” I wasn’t invited back for a few years.
One note: The fiasco vortex spins fastest in the United States. Yes, all news is international these days. Still, foreign companies are less susceptible to the kind of media silliness we have come to expect in the American political, business and media culture. If your company is based abroad, you stand a greater chance of slugging it out with the media in Europe or Asia than you do in the inferno of American media.