Managing Scandal: B-School Experts Weigh In

Photograph by Pete Souza/White House

Like business leaders, politicians often face the scrutiny that comes with scandal. Just last week, President Barack Obama had to answer questions about implications that members of the Secret Service and U.S. military consorted with prostitutes in Columbia on the eve of his arrival there.

The White House has expressed its desire to get to the bottom of the allegations, as well as anger at the possibility that they are true. Both steps are standard when it comes to the crisis-management tactics taught at top business schools. Still, there is more to be done if President Obama wants to remain unscathed—during this election year—by the scandal. Here, business school professors who are experts in crisis management share their advice.

—John Krajicek, executive professor and assistant director of business communication studies for the MBA and EMBA programs at Texas A&M’s Mays Business School: “I would recommend that [the President] make a general statement strongly condemning the alleged acts. He should be careful to couch this statement in conditional terms of ‘IF the alleged acts did indeed occur, THEN…’ Furthermore, if the senior leadership of the agency cannot effectively execute the investigation, the President should accept the resignation of the director. … [A] terrific example of effective crisis communication, and one much closer to the POTUS, was delivered this past Monday by Army General Martin Dempsey, chairman of the Joint Chiefs of Staff, who commented on the Secret Service crisis by saying, ‘We let the boss down.’ Dempsey also said, ‘I can speak for myself and my fellow chiefs: We’re embarrassed by what occurred in Colombia, though we’re not sure exactly what it is.’ That response is textbook. Pitch perfect. Humble, admitting that a mistake was made, promising the mess would be cleaned up, and that procedures would be put in place to ensure that this sort of mistake would not happen again. Obama should deliver a similar apology.”

—Robert Kulhan, adjunct professor of business administration at Duke University’s Fuqua School of Business: “Most important, President Obama should exhibit honesty and transparency. There are myriad examples of organizations that tried to cover up, diminish, and otherwise hide scandal, only to have that approach blow up in their faces. Yes, this happened under President Obama’s watch, but his response to the scandal will probably have a more lasting impact than the incident itself, in terms of public opinion. Further, the focus should be on the accused individuals, as well as the overall structure of the Secret Service. If this is an isolated incident, the punishment should be swift, so the media can move past it. However, if this sort of behavior is rampant throughout the entire agency, the media will find it and expose it. President Obama should take the scandal as an opportunity to evaluate, learn, and grow.”

—Robert M. McCann, who created, directs, and teaches the core management communication class for the full-time MBA at UCLA Anderson School of Management: “While there will inevitably be many twists and turns in this story as it plays out, [Secret Service] Director Mark Sullivan’s response has been what we would hope for in a crisis-communication situation of this nature. He was prompt and proactive in his response. He appears to be transparent in providing details as they emerge, and he is clearly committed to fixing the problem.”