Posts Tagged ‘Rupert Sosnoff’

Resilience Engineering #8: Rupert Murdoch’s Folly

by Gary Monti on August 2, 2011

Rupert Murdoch and the News Corporation’s latest problems provide ample opportunity to show both what happens when resilience engineering is ignored and how important it is for success in business and project management. It also provides an opportunity to point out the shortcomings of the domino and barrier models, both of which were described in previous blogs.

If you haven’t heard, the issue is illegal hacking of cell phones of crime victims to gain inside information and “scoop” the other tabloids thereby keeping their tabloid, “News of the World (NoW),” circulation at the top of the heap in the British market and continue to maintain substantial influence in British politics. During a Parliament committee hearing both Rupert and his son, James, said they were shocked, appalled and surprised to find out that phone hacking and other illegal activities were endemic in their tabloid.

Mr. Murdoch said it was the humblest day of his life. He apologized for everything but took responsibility for nothing. He stated, “I feel people I trusted – I don’t know who, on what level – have let me down, and I think they have behaved disgracefully, and it’s for them to pay.”

He went on to claim he did not know that 1.6 million pounds were paid out to two victims of phone hacking. Nor did he know the tabloid was paying the ongoing legal fees of a guilty private investigator, Glenn Mulcaire, and reporter Clive Goodman who were convicted in 2007 of hacking into the phones of the royal family’s staff. He also went on to say he would not step down as chairman of News Corporation and that he is the best person to handle an investigation as to what went wrong.

This is the domino accident model at its finest, or should I say worst. Find the “bad apple,” punish him/her, and throw the bum out.

But wait! There’s more! And it is worse! The flaws of the barrier model come into play when looking at the firing of the former editor of the now-defunct NoW, Rebekah Brooks, whose job it was to maintain the barrier model and validate the veracity of and methods used to obtain information the tabloid would publish. She was to make sure no ill-gotten information was used. But she consistently delivered what was desired and that was the end of it in terms of auditing.

These approaches are disingenuous by trying to say those in charge are almost as much a victim as the true victims of the hackings. But is that the case? NoW had a very robust model that consistently gained what it was after and Murdoch stuck to it.

Let’s explore and start by going back to the first blog in this series and get basic definitions for robust vs. resilient behavior.

Robust: A system is robust when it can continue functioning in the presence of internal and external challenges without fundamental changes to the original system.

Resilient: A system is resilient when it can adapt to internal and external challenges by changing its method of operations while continuing to function. While elements of the original system are present there is a fundamental shift in core activities that reflects adapting to the new environment.

So why is Murdoch’s behavior robust? At the end of the day what matters to Murdoch is getting the scoop and massing political power. For the number of years the illegal and unethical behavior had been going on employees at NoW knew this is the only standard by which they were judged. Why is this fair to say? Simple. Once the scoop and political power were achieved no attention appears to have been paid to the behaviors surrounding it. As both Murdochs said, “I didn’t know.”

The robustness (as defined here) of their news empire can be seen in former News Corporation executives being close to the Prime Minister as well as 10 of the 45 media specialists working for Scotland Yard being former NoW employees and, as mentioned before, the development of pipelines of information within the police via financial bribes. And this model definitely was robust. British politicians paid attention to News Corporation and how they are viewed and reviewed by it. This formula was working quite well and had so much influence that the purchase of the satellite broadcasting company, British Sky Broadcasting (BSB), was all but a slam-dunk. However, because of the drift that occurred that purchase is off the table for now.

Yes, NoW was sacrificed along with its editor but that actually isn’t a resilient behavior. Why? A robust approach was taken to essentially say, “We can continue with the purchase of the BSB satellite service. Look! It wasn’t us! It was irresponsible underlings who did this and we are punishing them.” This is a much bigger prize that has the potential of expanding the existing model even further.

The big plus with the resilient model is its comprehensive approach, socio-technical. It takes into consideration the attitudes and power structure that permeate a situation as well as the technology. In this case, Murdoch’s organization suffers from the same issues of robustness that contributed to the Challenger and Columbia space shuttle disasters or the Abu Ghraib prison debacle in Iraq:

  • A belief that a robust model can continually be pushed. This ultimately leads to brittleness and fracturing of the system due to inability to look ahead and prepare to respond accordingly;
  • Drift whereby an organization moves closer and closer to a disaster feeling smug the entire way because of previous successes but oblivious to the environment and the pending disaster;
  • Initial avoidance of independent audits. Those responsible for creating the context are in a position to judge the players, singling out lower level individuals for punishment while those with the power to create the situation are left untouched.
  • An ever-widening gap between work as imagined vs. work as performed

With the domino and barrier models the situation is ideal for a fragmentation to set in (which is essential when denial is practiced for the sake of achieving a goal) and powerful people can divorce themselves from culpability in who was hired and what they did (domino model) and point to the PMO or other group that was in charge that should have been making sure problems were trapped and neutralized (barrier).

So what is the lesson learned? The resilient approach keeps everyone connected. As many factors as possible that lead to sustained success or failure are considered. Adaptability is key. While several sets of standards may be involved there is an above-board balance created between those standards for all to see. Everyone takes responsibility for his or her share of the success or failure. This leads to sustainable performance and development of the most precious asset an organization can have – trust.

Rupert Sosnoff in his blog for Forbes Magazine sums things well, Rupert Murdoch is looking a lot like King Lear these days.