Wednesday, February 4, 2009

Corporate Rats Running Wild

Jack Nicholson, Leonard DiCaprio and Matt Damon delivered exceptional performances in the 2006 crime flick The Departed.

The basic premise: Nicholson (the mob boss) leans on his police informant to find an undercover officer who has infiltrated his organization. It turns out that Nicholson is also on the take, leaking information to federal authorities about the illegal activities of his partners in crime.

Basically, this is a story about what happens when rats run wild. In the end, everyone takes a bullet.

Life appears to be imitating cinema at Yahoo! these days. New CEO Carol Bartz is determined to stop the leaking of inside information to reporters like the Wall Street Journal’s Kara Swisher. One of Bartz’s ideas is to offer cash payments to employees who turn in their colleagues for such transgressions. Ironically, word of this policy leaked to Swisher.

OK…a couple of thoughts on this. For starters, it is incomprehensible for staffers to knowingly violate the terms of their employment agreements and disclose confidential information. There are more appropriate and ethical ways to express dissatisfaction with a company’s policies.

I also continue to be perplexed by the desperate measures employed by smart, experienced executives in an effort to squash leaks. For instance, members of HP’s Board hired private investigators who then used illegal tactics to identify an undisclosed media source.

And now we have Yahoo!’s Bartz who is creating an environment where rats will run wild. The company may in fact put an end to the leaks. Yet, they’ll be left with a culture defined by suspicion and mistrust.

I raised this issue with my colleague Chris Parente who faced a comparable situation at a former employer that battered by leaks to a local business reporter. Chris’ thoughts:

“(The payments) Never could work because it turns a bad situation even more poisonous. Employees spying on each other. That will further erode morale.

The approach that was effective for me was getting executives out of bunker mentality and actually talking with the media about what they could; making sure accurate information was included in the stories.”


wikinews45 said...

That's a good blog, Marc. As I see it, the essence is in your "One of Bartz’s ideas is to offer cash payments to employees who turn in their colleagues for such transgressions."

It's interesting that in the era of social media, that one of the main underlying forces of social media is transparency. It's a sign of our times that secrets are going to be an endangered species. So it is swimming upstream for Yahoo management to be introducing such a policy.

On the other hand, doesn't every company have some proprietary information? What's the boundary? Should an institution's proprietary info be treated with the same levels of security as intelligence agencies treat info? Can a company expect it's managers to make promises to guard secure information?

How might Bartz have handled this in a less authoritarian and more appropriate way?


Anonymous said...

A non-disclosure agreement signed by everyone involved all the way down to the support staff, followed by a briefing where those who sign are informed that the organization is willing to enforce the NDA in no uncertain terms. Then measures must be taken as to where certain meetings are held, files are kept, computers are used, etc. And if the project is really confidential, the use of certain code names for the project and the players. Off-site meetings and outside consultants (who sign NDAs) also keep some information out of the grapevine. If the subject matter involves insider information, then the SEC, Nasdaq or NYSE would serve as regulators and bring their own process and potential consequences for leaks. All of this should be communicated up front. No senior members of the team should be exempt. Contact with the media should be channeled through one person or office. Investor communications should be tightly controlled and logged. IT should be under scrutiny. Sales members and buyers who deal with vendors all have to be properly managed. Leaks can happen from the switchboard to a trade show floor. Once the organization has systems in place for managing certain types of information, you can ramp it up for highly confidential projects, or relax it for day-to-day things. I don't think giving people incentive to spy on one another is healthy, though.

Cheryl Howard said...

As a former reporter I see both sides. The immediacy of today's stories encourages columnists to take risks they didn't used to face--taking less time to confirm a rumor, for example. Just because someone from Yahoo sends an email saying, "The company will be doing x and x" doesn't mean it is accurate or even true. I also found myself proud of the businesses I worked for and, at times, I really wanted to chat about something cool at the office. In the past it wouldn't have occurred to me that chatting with a friend outside the business could end up being a distorted quote in someone's blog or network page. I agree that the best way to handle this is to have management be as open as possible at all times--and to state clearly when employees might hear rumblings but should keep the work to themselves. Those who worked at financial firms were always admonished to not discuss clients with anyone not directly related to the project. The same holds true with all information these days.