The first rule of crisis management is “get it out and get it over.” Our case-study subjects are Hillary Clinton and Ryan Lochte, but this isn’t a nice, neat do-this-not-that situation. Neither did it right. But they did screw up in instructively different ways.
The big news is captured in this morning’s Washington Post headline that’s a nightmare for the Clinton campaign: “FBI uncovers 14,900 more documents in Clinton email probe.” It’s a perfect illustration of what happens when you violate the first rule of crisis management by failing to announce everything you know about the situation, confess your sins, and apologize. The crisis never ends. It keeps inflicting its damage for weeks or perhaps years.
During months of damaging media coverage, Clinton refused to acknowledge that she should never have used a private email server exclusively while Secretary of State. When she finally did so, that was another news story. She turned over thousands of emails to the State Department and said that she’d turned over all her work-related email, all of which is U.S. government property. But she hadn’t. FBI Director James Comey said the agency “discovered several thousand work-related e-mails” that she hadn’t turned over. She said she hadn’t sent or received any classified information, but she had; the FBI identified 110 such emails. More damaging news stories.
A conservative group, Judicial Watch, has successfully sued to see more emails. It will surely release them strategically between now and the election for maximum damage to Clinton; it released a new batch yesterday. And now, on the same day, the FBI discovers a huge trove of documents that Clinton’s lawyers had not disclosed – more front-page news, more damage to the campaign.
Lochte’s crisis is far less consequential but teaches its own lessons. In case you’ve been in a cave, Lochte and three other U.S. Olympic swimmers got drunk and trashed a rest room in Rio, and then he lied about what happened. When his story unraveled, he lied about it to Billy Bush of NBC, but eventually he came clean – admitted he lied, apologized to his friends, who had upheld his lie, and apologized to the public. He came closer than Clinton did to following the first rule. He’s nonetheless paying a heavy price; yesterday he lost a million dollars’ worth of endorsement deals with Speedo, Ralph Lauren, and two other sponsors who dropped him. But at least his crisis seems to be over, and he can begin the long road back to a post-crisis life.
It’s worth noting that both Clinton’s and Lochte’s crises came within a whisker of never happening. Clinton’s private email server was unknown to the public until it was revealed in a House committee hearing on Benghazi. Lochte told his fabricated story to his mother, and it might never have become public if two journalists hadn’t encountered her by chance on a bus.
So in addition to a rule of crisis management, we can derive two rules of crisis prevention, for a total of three. One, don’t do stupid stuff. Two, if you do stupid stuff and it’s discovered, don’t lie about it. And three, if you lie about it and your lie is exposed, you’ve got a crisis, and observe the first rule of crisis management.
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What We’re Reading Today
VW makes peace with suppliers
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Anbang Insurance Group plans an IPO for its life insurance unit
The Chinese firm that owns the Waldorf-Astoria and tried to buy Starwood Hotels & Resorts is known for its secrecy. Now Wu Xiaohui‘s company will seek an IPO for its insurance unit in Hong Kong, requiring some financial disclosures. The target date is mid-2017. WSJ
Court reaffirms Russia’s ban from the Paralympic Games
The Court of Arbitration for Sport upheld a ruling by the International Paralympic Committee that bans the entire Russian team because of state-sponsored doping. IPC President Philip Craven and the committee based their decision on a World Anti-Doping Agency report that discovered a doping program instituted and run by Russian authorities from 2011 to 2015. USA Today
EpiPen’s dramatic price increase
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Building a Better Leader
One reason millennials are such good savers…
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Asking “how much did you make in your last job”…
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Wages for workers in the 25th percentile…
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Emails and Elections
FBI discovers nearly 15,000 more emails…
…from Hillary Clinton‘s personal server while she served as Secretary of State. The emails were not disclosed by Clinton’s attorneys. The State Department will screen the emails before releasing any; a judge has ordered State to begin releasing the emails sooner than mid-October, as planned. Washington Post
Donald Trump calls for a special prosecutor…
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Ohio GOP senator up for reelection adopts…
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Up or Out
Tableau Software has hired former Amazon executive Adam Selipsky as its CEO. Fortune
J.R. Sult has stepped down as CFO of Marathon Oil. Pat Wagner will fill the role until a permanent replacement is found. Nasdaq
Fortune Reads and Videos
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Could another Edward Snowden lurk in the NSA?
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Bill Gates’s net worth reaches $90 billion
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KFC is making “Extra Crispy Sunscreen”
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On this day…
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