Power Sheet: The Murdochs’ Mistake with Roger Ailes

But at another level, the story illustrates classically inept leadership at the top, and I don’t mean just by Ailes, but also by 21^st Century Fox CEO James Murdoch and his father, controlling shareholder Rupert Murdoch. We can blame them confidently because the extraordinary nature of the Carlson case leaves no possibility that the Murdochs were ignorant of Ailes’s behavior. In most cases that are settled, the allegations remain only that. But this one included an extremely rare feature, an unhedged, fulsome apology by 21^st Century Fox: “We sincerely regret and apologize for the fact that Gretchen was not treated with the respect and dignity that she and all of our colleagues deserve.” Why the apology? And how was Carlson able to extract $20 million from Fox in mere weeks? Well, it seems she had recordings. She had reportedly been secretly recording her meetings with Ailes for a year and a half. Allegations in her lawsuit, for example that Ailes said, “I think you and I should have had a sexual relationship a long time ago and then you’d be good and better and I’d be good and better,” were apparently transcribed from the recordings.

So while Ailes maintains he has behaved within the law, and no court has made a finding, I think we can give Carlson’s allegations more than average weight in depicting an atmosphere at Fox. It also becomes harder to dismiss the many allegations by other female former Fox anchors who spoke up after Carlson sued. It thus seems impossible that the Murdochs were clueless about how Ailes ran his ship. They must have chosen not to see what was there.

Such behavior is classically inept leadership because it fits an ancient pattern. How does a leader deal with a manager who’s producing knockout results but behaving repugnantly? The right answer is obviously to discipline or fire the manager. Results may suffer for a time, but the culture grows stronger. The far more common response is to look the other way. Great results continue for a time, but the culture is poisoned.

To switch metaphors, 21^st Century Fox skillfully extinguished the fire that Carlson lit, but far greater damage to Fox News had already been done and will take much longer to repair.

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