Water Rising: Minimizing the Damage from Corporate Leaks

By Richard S. Levick, Esq.

More than ever in this era of 24-hour news, blogging, and Internet buzz, leaks are an inevitable fact of government and corporate life. As long as there is someone in an organization with access to sensitive information and the determination to use that information to push a personal or political agenda, leaks will happen.

In corporations, as Carly Fiorina, the former chief executive of Hewlett-Packard, expressed it in a recent interview with CNET.com, “I think leaks out of the boardroom are a sign of dysfunction that has to be dealt with. Dysfunction occurs in a boardroom when people’s personal agendas overcome their set of responsibilities.”

While organizations can help protect themselves by building consensus and bringing in leaders who truly have the organization’s best interests at heart, no company can make itself 100 percent leak-proof. But a company can control how it responds to leaks if they do occur, often marking the difference between minimal damage and disaster.

The Hewlett Packard scandal is an obvious illustration of how a company’s response can go spectacularly wrong. By initiating illegal actions to investigate a leak from its board – from reporter surveillance to pretexting board members’ phone records – the organization turned a potentially difficult situation into a PR nightmare. The story became the investigation itself, not the leaks.

Leak investigations gone bad are more common than not. From Watergate to the Valerie Plame debacle, the last few years provide many such scenarios in the realm of both corporations and government. While corporate leaks rarely put lives at risk, as could have been the case when a CIA employee’s identity was revealed, leaks are nonetheless serious business for a corporation, affecting the company's bottom line while doing untold damage to its reputation and morale.

While it is certainly legitimate for a company to try to uncover the source of a leak, the investigation must be handled in the right way. At the same time, the company must do everything possible to resolve the problems that led to the leak. The media can't help you talk your way out of what you acted your way into.

Smart companies anticipate the possibility that an internal conflict, a possible irregularity, or a questionable practice could become public. They make sure that crisis management strategies are in place now, while the waters are relatively calm – which means setting up an internal chain of response while establishing a familiar and trusted crisis management team ready and able to jump in immediately when trouble strikes.

Journalists who thrive on conflict and controversy, and who directly benefit from leaks, will not wait for you to assemble your crisis team. With the right team already in place, you can often turn an event that might ordinarily lead to weeks of negative publicity into a short-term or even an overnight news event.

By contrast, when they learned of the leak, HP’s communications people were kept down in the food chain. They were the last to be brought in and should have been the first. Any company with a “plumbing problem” should want its communications people front and center, along with other objective, highly skilled specialists, such as law firms that deal with crisis management, ethical outside investigators, and forensic accountants. They should directly advise the CEO and other key personnel on how to deal with the media and on who should serve as spokesperson(s). They should likewise prepare a Q&A to grapple with the specific issues that will most likely be raised.

As Hewlett-Packard showed, another problem with leak investigations is that most companies don’t do enough due diligence on the companies they hire to do their due diligence, thereby exposing themselves to even greater risk. Many crisis management companies have long-term relationships with investigative firms whose credentials, ethics, and track record are well-established. Having a crisis manager who knows these people will provide the access and assurance you need.

When choosing a crisis management team, you want to pick a team that presents no conflict of interest with your company and that regularly deals with potential high-profile crises situations.  Companies should not pick a generic PR firm because they claim to have one crisis management specialist on board. The team’s specialization, integrity, and methods should be unquestionable, and the individual or company should have your absolute trust.

Some other points to keep in mind when working with a crisis management team:

• You and your team should share an understanding that a crisis management plan is not something set in stone but rather a fluid, evolving organism that needs to be constantly revisited. It should be a subject of ongoing discussion between you and your team long before a crisis occurs.
• Ideally, to strengthen your crisis management strategy, your team of lawyers, outside investigators, communications specialists, and others, should have collective experience that extends beyond just the general press. For instance, communications professionals will bring their know-how in dealing with the individual personalities in industry, legal, and general media. The lawyers will understand the evolving nature of privilege. The investigators will know when to say “no.”
• You should absolutely confirm that team members will, when a crisis arises, make themselves available on a true 24/7 basis.

The bottom line is that breakdowns happen. Having a trusted crisis management team on call is smart business. Top level executives who want to limit the “water damage” done by potential leaks should not wait until they spring a leak and the tides start rising.

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Richard S. Levick, Esq., President & CEO of Levick Strategic Communications, protects brands and reputations during the highest-stakes global crises and litigation. Honored as Crisis Agency of the Year by the Holmes Report in 2005, the Firm wins the hearts and minds of key audiences with comprehensive campaigns on behalf of clients targeted by regulators, embroiled in litigation, or confronted by grassroots movements. He was recently named to the PRNews Hall of Fame for life time achievement. Find a comprehensive arsenal of vital communications tools at www.levick.com, including books, newsletters, and helpful articles.