Empty Seat at the Table Devastating in HP Debacle

Imagine you’re the VP of Public Relations at a global mega-corporation. The company's Chairman calls you into her office and begins telling you about her plan to curtail some annoying leaks from the Board of Directors.

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“We’ll need to spy on our Directors and our employees, find out who’s leaking. We’ll need to spy on those dreadful journalists, too. We’ll hire an undercover investigative team that can mislead bank and telephone company employees into giving up their private records to help us find the leaks. We can even have the investigators pretend to be janitors working in newsrooms to try to over-hear any conversations about our company.”

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You would, of course, reply, “Are you nuts?!!”

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And the Chairman would regain her senses and get back to work on saner plans.

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The tragic-comedy at Hewlett Packard might have been averted if just such a scene had actually occurred. But it didn't. HP Chairman Patricia Dunn went full-speed ahead with her spying scheme without consulting the company's PR chief.

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So, where was HP’s Public Relations counsel when the company needed it most? Nowhere near the action. HP simply did not value professional reputation management; PR was, and remains, absent from the executive table at HP.

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There's a valuable, transforming lesson here for the corporate world. HP’s implosion makes a bizarre but eloquent argument for the establishment of a Chief Reputation Officer with more than just “a seat at the table.” The CRO should play a central role in any and every business decision directly affecting corporate reputation.

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Let’s take a closer look at HP’s executive structure.

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The company has a well-established C-Suite with a CEO, a CFO, CIO, a CMO, even a CS&TO (Chief Strategy and Technical Officer). And in response to the spy scandal, HP’s Board established a new position, CE&CO (Chief Ethics and Compliance Officer) October 11. That was certainly a positive step but it might never have been necessary had HP had an active and competent CRO with sufficient backbone to stand up to Dunn.

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At what table does the head of PR sit at HP? You won't find a VP-PR among the direct reports of Mark Hurd (who replaced Dunn as Chairman, adding to his ongoing responsibilities as CEO). That's the first red flag indicating that PR (and active reputational management) is not valued at HP.

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But it gets worse. Engelina Jaspers is HP’s VP – Corporate Marketing. You’d never know it from her succinct title, but Jaspers is also responsible for “corporate and media relations, employee and executive communications and region corporate affairs.” Evidently, at HP those PR responsibilities are blithely lumped in with "marketing" and don't even merit a mention in Jasper's title.

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Of course, integrating PR and Marketing into a single seamless conversation with the marketplace is a good thing, but total subordination of PR is not. How is the voice of reputation heard at HP?

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Let's turn the calendar back to September 28. Both Hurd and Dunn (left) were in Washington D.C. to testify before Congress in hearings on the HP spy scandal. USA Today devoted its Money cover story and a jump page to the proceedings, noting that that September 28 would be a “defining day” for Hurd and HP.

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And where was Jaspers? In New York, speaking at a Conference Board communications conference.

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I was at that Conference Board event that day. Jaspers, I recall, made a nice impression and spoke well (following her opening disclaimer that she would not discuss the HP leak investigation).  Her topic, ironically, was “A Global Challenge: Becoming a Most Admired Company.” But I can’t remember a single point she made, because the whole time she was speaking, the only thing running through my mind was “Why aren’t you in Washington today with your CEO at such a critical moment?” Jasper’s absence from the Congressional hearings speaks volumes about PR's empty seat at the executive table at HP.

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Which leads to two pressing questions:

• Will HP wake up and fill that empty seat with a strong and respected CRO to be the company’s voice of reputation and to help restore the “HP Way”?

• Does PR take an active place at the table at your company or your clients' companies? Does PR have sufficient stature that the Chairman (even a rogue Chairman) would seek PR's advice before launching a similarly ill-advised scheme with devastating reputational consequences?

Postscript: Mark my words. Five years from now, the office of CRO will be commonplace among global corporations. And ten years from now, the CRO will vie with the CFO as the most likely path to the office of CEO. Reputation is a corporation's most valuable capital asset and those who manage it best will be rewarded handsomely.

-- Jon Harmon

Comments

[Bill McKibben]

Jon,

Great piece in the BullDog today. HP still hasn't figured out what they are doing wrong. Lawyers show you where the edge of the law comes into play. Ethics is an entirely different discipline.

It shows in the title HP and others assign, Chief Ethics & Compliance Officer. Ethics is about doing the right thing; Compliance is about doing what the law requires.

I'm on my HP Laptop at this moment. Unfortunately their standards are not as good as their technology. Too bad; good company.

Bill