Posts

Willful, Wishful Blindness: Trust and the Real Learning from the BBC Crisis

/8 Comments/in , /by

The UK press is screaming ‘blue murder’ about the recent turn of events in the BBC:

  • ‘How to restore trust in the BBC’
  • ‘You don’t trust us – and maybe you never will’
  • ‘Trust lost, hard to regain!’

A crisis for the BBC? Certainly. But a “complete loss of trust” is a wild exaggeration. Still, there is one troubling problem at the heart of things, and the BBC must get at it: a willful and wishful discomfort with facing truth.  Vital for any organization, truth-facing is especially so for a news outfit.

The Apparent Problem

The problem in recent weeks has been in one part of the vast BBC operation – its flagship current affairs programme, ‘Newsnight’. There has been real incompetence and mismanagement, and people are rightly angry and critical. But this is an organisation that has real pedigree and a brand that is deeply respected and trusted the world over for the quality and integrity of its daily product.

Deeply held trust, reinforced over many years, simply does not disappear in one moment with one incident.  The BBC will take the steps to right the ship around ‘Newsnight’ and move on.

To recap quickly:

It turns out that one of the BBC’s leading (and well loved, but now dead) entertainers in the last quarter of the 20th century, Sir (!) Jimmy Savile, was for many years a serial and horrific abuser of many young and vulnerable people who came under his influence. It was extensive. It went on a long time. He was never stopped.

Then, ‘Newsnight’ did a poor job of investigating and communicating about the Savile case.  Compounding the error, ‘Newsnight’ wrongly accused a senior politician of serious sexual abuse in another situation. The newly appointed Director General of the BBC – George Entwhistle – resigned after just a few months in the job. Indignation, blue murder – loss of trust! – pour forth through all the media channels.

Here’s what caused the hullaballoo:

  •  Sheer incompetence – “ Newsnight’s journalism would have disgraced a student newspaper,” wrote one commenter
  • Over-bureaucratic, over-layered management, with diffuse accountability
  • Poor crisis management
  • A public primed to be cynical because of other recent scandals (not just NewsCorp)
  • A tone-deaf full year ‘pay-off’ of £495k to the resigning DG who had only been in the job for a few months
  • Hugely toxic ‘hatred’ of the BBC in some political and media circles that is easily stirred and spoiling for any fight
  • A shift in the dynamics of trust regarding media output. Restraint, rigour, caution, consideration of consequences – these apparently no longer engender trust. With the impact of the social media, trust today means sharing everything you know; transparency replaces judgment.

If that’s all there were, this would be just another scandal, albeit very public. But there is another, deeper level of concern.

Willful, Wishful Denial

What is much less certain is whether the BBC can change a culture that was willfully – perhaps wishfully? – blind to the horrible sexual abuse that took place around some of its programmes for young people. In one of the hospitals where Savile got away with all this, one interlocutor has recently said, ‘ We did wonder whether something was going wrong. But Savile simply pulled in too many funds for anyone to want to do something about it.’

This is a culture that suborns, induces, and nurtures moral blindness.

Margaret Heffernan talks about this in her recent book ‘Willful Blindness: Why We Ignore the Obvious at Our Peril’ (Walker and Company, 2011). She says:

We are all susceptible to willful blindness, ignoring truths about ourselves, each other and the way we live, that threaten our sense of identity and security…We all succumb to the human tendency to prefer people like ourselves, to readily accept information that confirms our sense of ourselves, and discredit data that doesn’t fit our dominant ideologies. And when people are tired, busy and distracted, it’s clear that the mind falls back on stereotypes and received wisdom.

Think News Corporation, Enron, Lehman Brothers (‘The CEO, Richard Fuld, organised his life to ensure that he never encountered employees unexpectedly’), Bear Stearns (‘The CEO chose not to implement a form of risk analysis that might have revealed how much debt the bank actually carried’) and the Catholic Church (‘When first confronted with the fact of child-abusing priests, the Church chose first of all to take out insurance’).

Heffernan argues that the root cause of our willful blindness is our human instinct to obey authority. ‘Research into conformity shows that most of us would rather give a wrong answer than jeopardise belonging to a group.’

It’s the Culture, Stupid

This is where the really fundamental work lies for the BBC – reshaping a culture that is less prone to willful blindness, and more driven by its values of independence and integrity. This kind of work is not easy.  So perhaps some of Heffernan’s prescriptions might come in handy along the way:

  • Become more aware of our biases
  • Overturn corporate cultures that reward long working hours
  • Actively seek out dissenters in our circle of friends and colleagues
  • Ensure that the powerful surround themselves with independent thinkers and critical allies who have the freedom and moral courage to tell them the truth
  • Re-examine the role of obedience and compliance
  • Teach critical thinking.

This is not the stuff of MBA programs. These are not issues to be solved by technocrats, or lawyers, or business process experts. They are the simple stuff of creating an ethics-friendly culture. Simple, of course, doesn’t mean easy.  But it is – let’s not forget – still simple. Seek the right thing, talk about it, and walk the talk.

Customer Loyalty Meets Rate Tarts

/0 Comments/in /by

To the American ear, the British occasionally come up with the most delightfully curious expressions (I suppose it works both ways).

Some of my favorites: a “cheeky pint,” and “chuffed,” as in, “I was bored to tears at the ballet—but then I caught Prince Charles’ eye, and he motioned to me to sneak outside and join him for a cheeky pint of Guinness. We had a blast—I was really chuffed about it!”

Add a new one (new to me, anyway). The BBC TV breakfast show recently introduced a story on credit cards by saying, “There’s no point in being loyal anymore—it only pays to be a rate tart.”

A rate tart. So that’s what it’s come down to.

It shouldn’t really be surprising.

Fred Reichheld’s 1991 book The Loyalty Effect summarized work in the 80s by himself, Bain & Company, and several thoughtful Harvard Business School faculty. Re-reading the preface 15 years later later is enlightening:

We found we could not progress beyond a superficial treatment of customer loyalty without delving into employee loyalty. We found there was a cause and effect relationship between the two; that it was impossible to maintain a loyal customer base without a base of loyal employees; and that the best employees prefer to work for companies that deliver the kind of superior value that builds customer loyalty.

We then found that our concern with employee loyalty entangled us in the thorny issue of investor loyalty, because it is very hard to earn the loyalty of employees if the owners of the business are short-sighted and unreliable.

Finally, predictably, we found that investor loyalty was heavily dependent on customer and employee loyalty, and we understood that we were dealing not with tactical issues but with a strategic system.

The credit card industry was a prime example for early loyalty research (MBNA in particular, if I recall), and “loyalty” is a term used heavily in financial services these days.

How, then, did a focus on “loyalty” yield today’s “rate tarts?”

Very simply, the case of “loyalty” is Exhibit One in a lemming-like rush by business to over-stress three simple concepts:

1. Profit is a measure of business activity effectiveness

2. Measurement is a valuable tool for management

3 . Activities can be disaggregated into smaller, measurable activities.

Those reasonable beliefs have metastasized into these distorted versions:

1a. Every business activity has value only insofar as it increases profit

2a. If you can’t measure something, you can’t manage it

3a. Anything worth measuring is even better measured in shorter durations and smaller units.

This extreme thinking has meant that the management of business these days is centered on short-term profit manipulation—not on long-term value creation.

Ironically, this is an area where political “liberals” and “conservatives” agree—their only difference is whether they consider it a sin or a virtue.

It was only in 1991—just 17 years ago—that we saw a different view entirely, a view that “we were dealing not with tactical issues but with a strategic system.” In only 17 years, that viewpoint is nearly gone.

In that time, almost every major strain of business thinking has moved in the direction of shorter measurements, more separation between employees, customers and investors, and more emphasis on reducing everything to its impact on the bottom line. Think CRM, collateralized debt obligations, outsourced recruiting, private equity, synthetic hedges, flipping companies, IPOs.

Most ironic of all: go back to the creators, the originators of loyalty programs—the airlines’ frequent flyer programs. Since frequent flyer programs’ profitability is measurable and separable, profit-challenged airlines are now thinking of selling their own frequent flyer programs to third party buyers.

This is the end-game; not just to outsource the management of “loyalty,” but to literally put a price on it and sell it. The buying and selling of “relationships”—it’s beyond absurd metaphors.

A Rumanian expat in the 70s explained to me the difference between the Russian KGB and the Rumanian Secret Police: “The Rumanians think they can corrupt you with sex, blackmail and money. The Russians are more experienced; they just cut to the chase and lead with money—it trumps the others.”

As credit card and other companies give customers more experience in the cynical management of "loyalty," why should anyone be surprised that the result is "rate tarts?"