How to manage issues before they become crunch-times Neryl East

“Rod, there are some people from the ICAC here to see you.”

There was no way of telling at the time, but those words heralded an unprecedented sex, extortion and corruption scandal that would see the city of Wollongong propelled into international headlines for all the wrong reasons.

By the time the dust settled reputations were demolished, a Council was sacked and a community left in long-term damage control.

Anyone in or around Wollongong at the time would already be very familiar with this story. To quickly recap, explosive evidence at a 2008 Public Inquiry of the NSW Independent Commission Against Corruption involved – among other things - sex between a Wollongong City Council town planner and businessmen, gifts given in return for development approvals, extortion by conmen, and political corruption.

As a result of the public inquiry, the ICAC found ten people to be guilty of corrupt conduct, with recommendations for criminal charges to be laid against eight of them including four city Councillors. It remains the biggest scandal in Australian local government history and led to major changes in the rules around political donations.

In my book Named and Shamed: Rod Oxley’s Inside Story of the Wollongong Corruption Scandal, I relayed Council CEO Rod Oxley’s take on the ICAC investigation and findings, including the dramatic raid on the Council headquarters in 2006 that first propelled the case into the public domain.

He gave his account of the extraordinary courtroom scenes during the ICAC public inquiry and the Commission’s tactics in gathering evidence.

Having been “named and shamed” yet not recommended for prosecution, Oxley issued a chilling message for anyone in a senior role: this could happen to you.

A few years on from this infamous episode, there are still plenty of lessons for anyone in a senior position, regardless of whether that’s in a public organisation, a business or a not-for-profit. It also makes a compelling case study of an organisation in crisis, complete with full-blown media frenzy. How does such a predicament come about, and is there anything that can be done to avoid it?

Crises can and will strike any organisation. They may not be as headline-grabbing as the Wollongong corruption scandal, but they will have a significant and serious impact on your operations. Some fall into the category of what the text books describe as a “cobra crisis” – that is, an unpredicted, catastrophic event such as a natural disaster, major act of sabotage or something on that scale. While the Wollongong case might appear to fall into that category given the way it erupted so unexpectedly in the courtroom, in fact it was much more like a “python crisis” – a series of issues that slowly gather momentum and ultimately suffocate an organisation.

! Neryl!East!Communications!2012!!www.neryleast.com! Much has been written about cobra-like disasters and how to manage them when they hit. Far less discussed are the key actions a leader can put in place to help safeguard their organisation against a slow but steady escalation of issues. Here are some lessons from a slow-burning yet catastrophic situation like Wollongong’s:

1. Know what’s going on. Stay connected.

The ICAC’s findings made it clear that as the leader of an organisation, your actions set the tone for the entire culture of that organisation. There’s also an expectation that you know what’s happening among your staff, even if there are more than 1000 of them.

The Wollongong situation started with one employee doing the wrong thing, and it snowballed from there. However challenging it might be – particularly if you have people spread across geographic areas – it’s critical you find a way to keep your finger on the pulse of your workforce.

Think of issues management like weeding a garden. You need to make sure the garden is free of weeds to begin with, and then it’s a case of constantly checking and removing any signs of weeds trying to break through the soil. I’m not advocating “big brother” tactics, rather having open, two-way communication with staff, with efficient and loyal management networks to ensure any brewing issues are raised, discussed and appropriately dealt with.

At the very least, you need to see your staff and be regularly seen by them. Avoid being the type of manager who hides in an office and communicates by email. Make face to face your interaction method of choice.

2. Scan your environment. If you can’t, make it someone’s job.

When it all boils down, an issue simply means someone’s expectations haven’t been met. That someone might be a customer, a board member, a member of the public or an entire nation, depending on your line of work. The absolute best way to address an issue is to deal with that unmet expectation straight away, before the matter can go any further.

The hard part is knowing about it in the first place. These days people are much more inclined to use social media than quietly let you know they have a problem. So, as well as knowing what’s going on among your staff, you need to have a clear understanding of what’s happening in the outside world in relation to your organisation.

“Environmental scanning” in this case doesn’t have anything to do with global warming. It’s about you monitoring the environment in which you operate, with antennae primed to pick up any signals of impending issues that could affect your organisation.

In practical terms, that can mean talking to your frontline or customer service staff to monitor any spikes in inquiries, keeping in touch with key influential people among

! Neryl!East!Communications!2012!!www.neryleast.com! your audience groups, and monitoring online and traditional media. While that sounds like a substantial workload, it will pay dividends in terms of dispersing any pythons before they get you into their squeezing grasp.

It’s money well spent to turn this task into someone’s specific role. If you have a communications team or person, much of this falls logically into their domain and should form part of their work plan.

3. Have trust among your staff so they feel comfortable owning up to mistakes.

In my experience, an organisation is usually its own worst enemy when it comes to causing potentially negative issues. We seem to be very good at shooting ourselves in the foot. Many issues arise because someone has made a boo-boo, then tries to cover it up – or perhaps over-compensates for it in some way.

A few years back I was doing some work for a metropolitan university (which will remain nameless) and one morning the chief librarian came into my office. I noticed that he looked a decided shade of green.

When I asked what was wrong, he confessed to something quite remarkable. It turns out the university had been given a large donation of books by another institution, but actually had no need for them. Embarrassed by the dilemma and deterred by the high cost of appropriate book disposal, library staff had applied some rather misguided creativity and buried the books at the back of the university’s sports oval.

The student union had got wind of the illicit interring and, not surprisingly, was unimpressed and had gone to the media. The chief librarian was visiting me because Channel 7 had rung to say they were on their way to the campus to cover the story.

The situation wasn’t pretty, but it could have been much worse if I hadn’t been given that heads-up. Thanks to the librarian’s confession, I was able to immediately put media management strategies in place and Channel 7 was deterred from running a highly damaging story.

The moral is, do whatever you can to foster a climate where staff aren’t afraid to own up when things go wrong. I’ve worked in places where employees operate in a climate of fear of making a mistake, and that’s just asking for dangerous cover-ups. While poor decisions obviously shouldn’t be encouraged, it’s important to cultivate a culture of openness, honesty and respect where there’s an understanding that people come to work wanting to do the best job they can.

4. Have a culture where people ‘look out’ for the organisation.

In the same vein, promote an environment where staff feel pride in the organisation and will take actions that are in its best interest.

The ICAC investigation at Wollongong came about because a disgruntled staff member turned whistle-blower and went to the Commission with complaints about the actions of a town planner. The rest is history. I’m not suggesting employees

! Neryl!East!Communications!2012!!www.neryleast.com! should be gagged or discouraged from reporting inappropriate behaviour to relevant authorities. What I am saying is that it’s more conducive to effective issues management if their first port of call is the organisation’s own processes for dealing with such behaviour. That will only happen if a) the processes actually exist and work and b) the workforce feels confident and comfortable in using them.

Creating pride and trust in an organisation is not a quick fix. The organisation and its management must first be deserving of that pride and trust. Genuine, two-way communication and engagement, celebration of collective achievements and passionate, inspirational leadership are just a few of the necessary ingredients.

5. Have great relationships with your customers and other important people.

If you have strong and trusting relationships with the key people or groups who can impact your organisation, they are more likely to come to you if an issue arises. And that’s exactly what you want. You can then quickly get to the crux of the problem – what expectation hasn’t been met – and do something about it.

Continually check in with the people who matter most to your operations and ask how things are going for them. They might be key community groups, government agencies, customers, suppliers, neighbouring businesses, sponsors, committee members, or anyone falling under that broad umbrella term of “stakeholder”. Use every interaction as an opportunity to build rapport, find out their expectations and how you can meet and exceed them – as well as identifying any areas where you might be falling short.

If you’re not able to do this on a large scale yourself, make sure your management team has it covered. And of course if a problem is picked up, make sure it’s dealt with ASAP and let the person or group know how it was resolved. Close the loop.

6. If something is amiss, address it immediately by having excellent processes.

Whether it’s inappropriate or illegal staff behaviour, a mistake, an upset stakeholder or some other issue, immediate action is the key. The head-burying approach will never help avert a building crisis.

Some issues require formal processes and a clear demonstration of remedial action. Ensure you have best-practice processes for dealing with serious matters like staff misconduct. You might think they’ll never be needed however if they’re not in place, you already have a python crisis waiting to happen.

Staff errors may not involve misconduct, but if the mistakes form part of a pattern they might require performance management. As I’ve already suggested, not every mistake is a hanging offence. Your workforce needs to feel comfortable about taking responsibility for things that go wrong. At the same time, there can’t be a policy of endless tolerance. If someone is repeatedly making major mistakes that put elements of your business at risk, there need to be appropriate processes and consequences, within industrial relations boundaries.

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7. Be prepared for short-term loss for long-term gain.

Sometimes dealing with an issue requires a tough decision. If serious trouble is brewing in an organisation, it takes true leadership grit to look it in the face and do something about it – particularly if it involves a senior or long-serving employee. It can be much more palatable to take a softer approach and hope the matter sorts itself out over time. Generally, it doesn’t work that way.

I’ve seen organisations tolerate significant dysfunction because the leader was reluctant to challenge a senior manager. I’ve witnessed a business teeter on the brink of going under as a result of an employee’s continual mistakes. Both cases would have escalated to an organisational crisis had the leader not realised – in the nick of time – that a short-term loss was the only way to avert long-term disaster. They took some difficult decisions and addressed their respective issues.

8. Nothing is ever hidden. We used to worry about an issue appearing on the front page of the local newspaper. Now’s it’s global before you know it.

I’d like a dollar for every time I’ve been asked to keep something out of the media. (As I’ve already said, the most effective way to do that is to actually address the issue itself. If you’ve done the wrong thing or have an upset person on your hands, genuinely sort out the problem before A Current Affair comes a-knocking). In any case, we can’t assume any more that an issue won’t become public. It probably already has, before you even know about it. We used to talk about the “Mercury test”, referring to our Wollongong newspaper, the Illawarra Mercury. If an issue arose and we weren’t sure how serious it could become, we’d ask ourselves, “how would this look on the front page of the Mercury?”

Now, ask yourself how your organisation will look – and the long-term impact – if your issue were to go viral.

The point of all this is, never, ever assume you can keep a negative issue quiet. The world now has many ways of finding out. Instead, look the issue in the whites of its eyes and deal with the sucker then and there. If the media comes calling, you’ve already resolved it and the outcome will be so much better.

9. If something does go wrong, be honest about it.

And when it comes to making public statements about your issue, authenticity is key. Be prepared to say what happened, and what you’ve done about it.

Public statements don’t just mean speaking to the media. Make sure you communicate to all your important audiences, starting with your staff. Work from the premise that no-one with a stake in your organisation wants to get a nasty surprise by seeing negative stories in the media or online, that they hadn’t already heard – ideally directly from you.

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One of the very difficult aspects of the Wollongong City Council case what that, immediately after the ICAC raid back in 2006, the small number of Council staff who knew about ICAC’s presence were ordered not to say anything about it. That left more than 1000 staff, elected Councillors, the media and the general public in the dark and eagerly swallowing all manner of rumours. Not helpful, in an already volatile situation.

10. Cultivate positive relationships with the media.

That said, I can’t emphasise enough the value of having great relationships with key journalists in your sector. I don’t mean anything below board here, but strong, professional relationships where you can be comfortable giving reporters the heads-up if something goes amiss and know that you’ll get a fair run. At the end of the day, that’s the best that you can ever wish for from the media as they’re there to report the news objectively, not to help you look good.

Strong media relationships start with understanding how journalists work, what they look for in a story and knowing what you can offer to help them do the best job they can. Like any relationship, it’s built over time and involves trust and respect on both sides. The midst of a crisis is not the time to suddenly start trying to be the media’s friend if you’ve never shown any sign of savvy media relations in the past.

Start developing positive media relationships in the good times – or enable your communications person or team to focus on this as part of their role – and you’ll see the benefits during the hard times in terms of more balanced coverage and opportunities to use the media as the valuable communication channel that it is. It won’t work in every situation and it’s no substitute for actually resolving the issue at its core – but it’s well worth the effort. If you don’t know where to start in this regard, enlist the help of a communication professional.

The Wollongong City Council scandal hit the media as far afield as London and its impacts continue to be felt. A massive effort in reputation management has enabled the organisation – and the city – to get back on its feet.

There are no guarantees your organisation will never find itself at the centre of a similarly-sized storm. However, applying the steps I’ve discussed will take you a long way towards building ‘reputation capital’ rather than stockpiling issues that could ultimately grow to python proportions.

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