Unexpected Ethics Challenges With Plant Closings and Fake News: Mike McDougall, APR, Fellow PRSA

Joining me on this week’s episode of Ethical Voices is Mike McDougall, APR, Fellow PRSA, the president of McDougall Communications, and the former global vice president of corporate communications with Bausch and Lomb.

In this fascinating and practical interview, Mike provides outstanding advice for dealing with difficult issues, including:

Why don’t you start off by telling our listeners a little more about yourself and your job and your career?

Well, my career started in an agency environment. I came out of Boston University with a communications degree and found myself in the metro New York area working in the agency environment. I then moved upstate to Rochester, the home of Eastman Kodak, to be closer to family and worked in the agency environment up here until big old yellow Eastman Kodak company came calling. I ended up there running product and service digital PR for a series of years. I then made my way over across the street to Bausch and Lomb, the eye health company where I had the great privilege of leading global communications of public affairs.

In 2011 I went back out on my own. So it came full circle, and I founded my own shop, and today we work with a variety of clients primarily in technology, health care, medical device, and professional services around the world.

What is the most difficult ethical challenge you ever confronted in your career?

I think we have ethical considerations each and every day. During my time in-house we were going through a series of changes in the organizational structure. And one of those changes meant closing a sizable manufacturing facility overseas. That’s not atypical in today’s environment, but the ethical challenge was on a few fronts.

One, we had just been to that facility a few months prior with a new CEO, talking to that employee base on how valued they were, of how incredibly important they were to the organization and the future of the organization. Now, six months later we found ourselves facing the need, because of production capacity issues, to shutter that plant as a whole. So you had an ethical issue of what do we tell you? Was it the truth? Was it not? How does that square with what we’re about to do?

The second ethical issue was community facing. Could you go in and essentially create a significant hole in the community where that facility was located? We were the fifth largest employer in a large metropolitan area in the UK. So there would be consequences to that community.

And then the third ethical issue behind that were some guarantees that we had made to government about labor and about staffing levels. Here’s the unique thing. By the time we would announce the plant closing, we would have met those guarantees for staffing and could essentially retain a significant amount of investment made by local government and the federal government. However, would it be ethical to do so? Should we retain those funds while technically we had earned them but quite honestly three or four days outside of the window where we earned them, we’re now announcing we’re shutting the plant down.

So that was the situation we went into, and then it became, “Okay, how do we handle this series of ethical challenges from a business perspective but also from a communications perspective?”

Let’s delve into those a bit more.  You talked about how your executives made promises that need to change?  Does this undercut the credibility and trust across the organization? What do you advise?

I think it does, and I think there’s always going to be that challenge when you make any sort of projections or state absolutes. In this situation what we advised our CEO who is a veteran of the industry, thank heavens – he’d earned his stripes and had been here before, was a couple of things. One, we need to go in and tell the truth. We need to explain to them that at the time, they were extremely valuable, they still are but in weighing what the future of the organization looked like, as a whole we needed to take this action. That by not doing so, we were putting the entire organization in jeopardy, and as much as this is news we didn’t want to have to bring to them, it was incumbent that we do so.

The second thing, and he agreed to it, is he delivered that first message. He needed to deliver the second message. Do not pawn this off to somebody else to go in and clean it up. That’s the mark of a leader. And he was very willing to do so. So I think that first and foremost helped us over that issue and actually won the respect of the other plants as well. To say, “You know what? We may not like this, but at least the organization is being truthful with us.”

Did he go back in person and talk to them?

We did. I remember vividly standing with him here, and outside a meeting where we were discussing what we needed to do I said, “You know in my view we need to go back in person. You need to go on to the plant floor and address not only one shift but all three shifts of employees. Tell them this to their face.”

And he said, “You know what? That’s the right thing to do. I’m not going to like. It’s not going to be fun, but it’s the right thing to do, so let’s make it happen.” But there’s other considerations that come with that. As a multinational with some prominence, there’s also some risk. So it was a matter of making sure we not only had him prepared from a messaging standpoint, but also we prepared him from an emotional standpoint. We had folks crying, lashing out, threatening violence in some cases. And to make sure he was ready to face that situation. And he did so, and I think it worked out for the best.

Was that just a matter of you working with him through all of the different potential issues?

It was. We did some training with him and some other members of our executive team at the time. In the role play we had some of our team mimicking what we thought we’d see, truly lashing out, blaming these executives not as a company but personally for ruining their lives, creating issues where kids might not be able to return to college, questioning if they can put food on the table. I remember one executive actually standing up and putting the mic off and saying, “I can’t do this. Somebody else has to go. I just can’t handle this.”

And we brought him back to the point where we said, “Look, we understand, but this is the role you’ve chosen. You’re making this decision. We need you to be here to share this. That’s the right thing to do, and as tough as it is, it’s going to ultimately earn their respect and make this go all the more better.”

We got him back in the right place and coached him up, and it worked out. Preparation is essential for sometimes executives will say things on a comforting basis and then make the situation worse.

What about the commitment to the government?

That worked out well. You know the piece of that too was working with our CFO at the time. As a communications team we did convince the organization to hand back that investment that had been made in whole to the UK government and say we don’t need to, but this is the right thing to do. We cannot walk away from this in good faith taking your money and closing the plant.

The money involved was considerable. It was material in terms of the amount of cash that would be returned. And there were certainly voices in opposition to that from purely a financial perspective, but what we did is that we couched in the whole of the communications program to say that by doing this we expect to achieve a positive overall return or a better return than we otherwise would. And ultimately the government, on the floor of Parliament, said this is one of the best corporate closures of a site they had ever seen. Which was certainly a nice compliment. I wish it was a compliment that never had to be made, but the thought was, “You did it the right way.”

What was the process you used to make the call?

It was communications and finance discussing it. I brought in some other peers, external council to not necessarily to validate the opinion but to truly provide an independent look at what we should be doing. We also brought to bear just the nature of who we were dealing with as well. This wasn’t just a workforce or a labor development. The head of government at the time was a former economist, so we were dealing with someone who could look at this objectively and look at our financial reasons for pulling out and framed it in that matter. But you know if he could look at that on the positive from our view, he would also look at something like this investment and say, “Look. You’re walking away.” So it was helping our own team better understand the group we were, and the individuals we were dealing with in local government and national government.

Ethically, what do you do with the community that was home? What are some of the considerations you would look at and how do you work through it?

I think you have to ask yourself is what has the organization gained from the community over its tenure there? There had come to be an expectation that the community will supply a viable workforce. They’re going to supply a steady stream goods and services that you can rely upon, utilities, water, power and you can’t take those for granted. So they’ve lived up their end of the bargain as a community. What do you need to do now if you’re leaving? So that’s first and foremost is to help people understand that that’s the context.

The second is to really give your own internal team context around what your leaving may do. And I see this quite a bit with organizations who have leaders in headquarters that are hundreds if not thousands of miles from a site that they’re affecting. And you want to bring this to light. You want to really illustrate what a pull out looks like and what it likely will do for the community that you’re leaving. So just to have that acknowledgement.

Third then is to really figure out what you can do to mitigate the effects of that closure. And it can be multiple things to put forward.

  1. You don’t want to overpromise.
  2. What you do promise, I want to make sure you can fulfill. The worst thing is to make a promise and then you close ahead of schedule, the pullout, faster and those services die.
  3. Really make sure that the services you’re putting in place are not just for show. They’re actually going to help those that are effected. So in this case we asked local community leaders, we were with the local HR teams, on what skills were most needed in that community? What skill sets could be transferable from the employees who would be displaced? And really set up job training programs specific to the needs of that community as opposed to just a generic job skills program that we could have put anywhere in the world.

Did it completely mitigate us leaving? Absolutely not. I don’t think you’re going to see that. Did it help? Yes. And you want to make sure you’re being seen as helpful as opposed to just checking the box and moving on.

Looking back at the situation, is there anything you’d change or you’d do differently?

This was on of the toughest situations of my career, but it was more of a model for my career. I was lucky to work with a senior executive team who understood the issues. These were some folks who had 30 plus years of experience with multinationals and had the understanding of what the alternate reality could have looked like if we didn’t do it the right way. I would love to have been in the loop a little bit earlier as even some of the closure discussions were percolating in different levels of the organization. So we got in relatively early on and had a chance to form what would occur. Earlier is always better.

I think the other is not so much would I change what happened what then, but did we change what was to come? And we did. We continued to have issues around the globe and pointed to this as a model then of how to handle those. Of how to come in early. How to have those conversations with government, with local officials. It really changed I think how this organization went about site closures and really doing so the right way, in an ethical way.

Would you see this changing today with social media?

At the point this happened, social media was alive and well. I think today in the same setting much of the same would happen. It would just do so at an accelerated timeframe. We had the case here where we did not want news trucks coming into the plant and accosting employees as they left the parking lot, obviously distraught that their livelihoods would be interrupted. We brought our senior executive team off site to essentially draw our journalists a little bit away from the plant to have the interview which was good.

Today, though, you’d have the employees live streaming themselves immediately when the news hit. Back then we saw social posts within 10 minutes go up. But we also interestingly addressed that. We said, in the discussion with employees on the plant floor, “You can have a conversation. In fact we expect you to have conversations with friends with family. This is something we don’t want you to go into feeling isolated, but we also want you to respect your fellow employees around you. You’re at shift one. You have two other shifts coming in that we want to make sure we can have a conversation with them. They’re going to know by the time they arrive here, but be respectful of others you work with. We’re all in this together.”

It helped. It didn’t prevent the flow of social, and we wouldn’t’ want to see that. It helped I think the employee base be more thoughtful about what they were putting out in the heat of the moment.

Is there another ethical encounter that you’d like to share?

Oh, sure. I’ll give you a quick one here.  First to avoid ethical challenges, we ask ourselves two questions when working with any organization. Are they ethical? And is what they want to do legal? If we can’t immediately answer yes to both we pretty much pull away right from the start. So we tend to surround ourselves with folks who are acting ethically anyways.

But we had another situation where a client wanted to enter a news cycle with some breaking news. And on their own they went out and announced that they had an employee relief fund around a natural disaster that had just struck.

Why?

Because they wanted to be in the global conversation around this natural disaster and to be seen as forward looking and helpful of their employees.

The challenge being was twofold. One there were very few employees of the company in the area where this natural disaster occurred. So even if there was a relief fund, it was great but would have on the whole minimal impact. Two was there was no employee relief fund. They purely generated this for the media exposure.

It came to my attention about two hours later. Unfortunately I was traveling. It was an issue that happened in Asia during the overnight hours and early morning hours when I was still asleep on the West Coast. And when I woke up I woke to a series of emails and texts asking from peers about this employee relief fund. Why hadn’t they heard of it?

We quickly advised the CEO of the company that we should retract this. Remove it and apologize that it was put out, not even in error, but put out without proper counsel and then stuff the genie back in the bottle as much as we could. Unfortunately, the person who drove this doubled down and so much wanted to be part of the conversation. They continued to make contacts on their own. We found ourselves facing questions from media later that day for details around our employee relief fund. How long’s it been in existence? What do you plan to do? We chose to be honest to the extent we could with media by saying that those details were not available. We needed to evaluate how this would be operationalized without throwing the organization under the bus. And then what we pushed for and got was the establishment of an employee relief fund immediately from the organization. If you’re going to say you have one and you don’t, we’d better create one now.

Oddly enough the view inside the organization and particularly the executive who was pushing this was, “No, we don’t need to. We can just say we have one. We’ll figure it out later.”

That’s probably the most egregious ethical breach I’ve seen in my career. And honestly he thought he was smarter than anyone else apparently in the world and no one would figure this out.

My view of crisis communications is don’t put your brand in front of a crisis knowingly. A natural disaster’s not a place I want my brand to be. Unless there’s good reason for it to be there. That was a horrible, horrible situation. We mitigated it.

There are times when you can get involved. In a different life when I was working for B&L, California wildfires, we would ship an 18 wheeler full of eye drops and solutions at the fire fighters. Why? Because it’s the right thing to do.

Sure, did we tell our industry that we were doing this? Yeah but we didn’t hype it. We made them aware, and then because there others doing the same thing. For us it was being part of a community that needed to have the backs of a group, that ultimately was looking out for our customers and looking out for the country. That’s the right thing to do. That’s going to come back and help you. Shameless promotion is not. I think people see through that pretty quickly nowadays.

Are there new areas that are developing that you have ethical concerns about?

The biggest for me is what is the responsibility of a communications professional when it comes to privacy and the use of data? Now we’re seeing this in any number of forms here over the past several years. I think there’s going to be an incredible onus put on us to not only use the data we have before us in a way that’s ethical but to also counsel our organizations and our peers on what is acceptable and what is not. It’s the classic. Just because you can doesn’t mean you should.

We’re also going to have I think the spotlight placed on the communications profession along with some in marketing on how some of this data is used more and more, and we’re going to have to answer for that as an industry but also as individuals and as our own teams. So if your organization doesn’t have its privacy policy in place. A. I think it should with relation to data. But also, I think your communications team better start having that discussion and understanding where you will and won’t go when those requests start coming.

I’m not sure sometimes that any single person in the organization, especially for a large organization, truly understands what exists. Even if they do, sometimes they can’t see the potential issues in what they hold. Because they are gaining the information with one intended use and hopefully are well-intentioned and aren’t looking at the downside uses of not only using that information but holing that information. Even holding it has significant consequences.

There needs to be a sense from the organizations you’re counseling that your use of that data is a privilege and not a right. Just because consumer checks the agreement box on a scrolling privacy screen, that’s going to take them 8 or 10 thumb clicks to go through, that doesn’t mean they know it or understand it.

So from an ethical perspective I think we’re still in the early days, very early days of discussing privacy and data privacy.

What are you and the folks at McDougall Communications doing to keep on top of this?

A. We can’t read enough and study enough to keep up with it on all areas by any means. It’s bigger than just us and our capacity. One is finding partners. Finding partners within clients’ organizations who understand and who’ve made this their full-time profession. Typically that’s within legal. A couple of our clients, their chief privacy officers, we have good relationships with and are in regular contact with them to discuss the implications.

Two is finding partners beyond our clients though. Other law firms, other agencies who are specializing in privacy issues to make sure they’re a resource for us should we need the expertise.

And third is really counseling our clients to be cognizant of this. Even if they don’t completely understand it, they need to be aware of it. And that’s much more at the senior levels than anything else. In some cases there’s a definite appreciation. In others I think there’s a belief that we just wish it would go away, but we all know that, I’m always fond of saying, “Hope is not a strategy.” We can say, “Well, we’re going to have this conversation again with you in a couple of weeks. This is not going away and neither are we. Let’s figure out what to do.”

What is the best piece of ethics advice you were ever given?

So I’m going to round back to my first story. This was the CEO I worked with and on his first day on the job. I was in his office getting to know him a little bit, and I said, “What’s your view of communications? How would you like to proceed from here on?”

And he said, “You know, Mike. My mom told me ‘Tell the truth and you’ll never have to remember what you said’.”

We live in a day where transparency is not only called for but is easier to come by. Where non-transparency will be not only questioned but punished in so many ways. Ethics I think in so many ways comes down to being honest about yourself, about the situation ahead of you, and about the facts of the matter. As communicators, there can be times where we can’t say everything that’s before us, we can’t share the entire story, but those parts where we can, I think we need to be again honest with ourselves, honest with our teams, and really try to do what’s best by the organization and our employees and our customers. I can certainly tell you sometimes it’s not going to be fun. We’re going to be in the hot seat, but we signed up for this. I could be in a different career. I signed up to do this, so let’s take responsibility for it and move on to the next challenge.

You can listen to the complete interview, with additional information and insights here:

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Mark McClennan, APR, Fellow PRSA

Mark W. McClennan, APR, Fellow PRSA, is a senior strategic communications professional. He has more than 20 years of tech and fintech agency experience, served as the 2016 National Chair of PRSA. drove the creation of the PRSA Ethics App and is the host of EthicalVoices.com
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